<PAGE>
===============================================================================
THE STRONG
CASH MANAGEMENT FUNDS
ANNUAL REPORT o FEBRUARY 28, 1998
[PHOTO OF BOY AND GIRL]
THE STRONG ADVANTAGE FUND
--------------------------------------
THE STRONG MUNICIPAL ADVANTAGE FUND
--------------------------------------
THE STRONG HERITAGE MONEY FUND
--------------------------------------
THE STRONG MUNICIPAL MONEY MARKET FUND
--------------------------------------
THE STRONG STEP 1 MONEY FUND
[STRONG LOGO]
STRONG FUNDS
<PAGE>
8
EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING
These common-sense rules are followed by many successful investors. They make
sense for beginners, too. If you have a question on these principles, or would
like to discuss them with us, please contact us at 1-800-368-3863. We're here
24 hours a day, seven days a week to take your call.
- -------------------------------------------------------------------------------
[PICTURE OF FOLDER LABELED INVESTMENTS]
1. HAVE A PLAN. Even a simple plan can help you take control of your financial
future. Review your plan once a year, or if your circumstances change.
- -------------------------------------------------------------------------------
[PICTURE OF CLOCK]
2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your
potential investment risk.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION]
3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes - stocks,
bonds, and cash - you help protect against poor performance in one type of
investment while including investments most likely to help you achieve your
important goals.
- -------------------------------------------------------------------------------
[PICTURE OF MEMO REMINDER TO INVEST]
4. INVEST REGULARLY. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of short-term
market gyrations, and you attend to your long-term plan before you're tempted
to spend those assets on short-term needs.
- -------------------------------------------------------------------------------
[PICTURE OF GRAPH SLOPING UPWARD]
5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best discipline
is staying invested as market conditions change. Reactive, emotional investment
decisions are all too often a source of regret - and of principal loss.
- -------------------------------------------------------------------------------
[PICTURE OF PIE CHART OF ASSET DIVERSIFICATION EMPHASIZING STOCKS]
6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG-TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.
- -------------------------------------------------------------------------------
[PICTURE OF DOLLAR SIGN]
7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current needs,
including emergencies, use a money market fund or a bank account - not your
long-term investment assets.
- -------------------------------------------------------------------------------
[PICTURE OF MAGNIFYING GLASS]
8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions...request
information...make up your own mind. And choose a fund company that helps you
make informed investment decisions.
<PAGE>
===============================================================================
THE STRONG
CASH MANAGEMENT
FUNDS
ANNUAL REPORT o FEBRUARY 28, 1998
TABLE OF CONTENTS
INVESTMENT REVIEWS
The Strong Advantage Fund................................................2
The Strong Municipal Advantage Fund .....................................4
The Strong Heritage Money Fund...........................................6
The Strong Municipal Money Market Fund...................................8
The Strong Step 1(SM) Money Fund........................................10
FINANCIAL INFORMATION
Schedules of Investments in Securities
The Strong Advantage ..................................................11
The Strong Municipal Advantage Fund ...................................15
The Strong Heritage Money Fund.........................................21
The Strong Municipal Money Market Fund.................................25
The Strong Step 1(SM) Money Fund.......................................33
Statements of Assets and Liabilities.......................................35
Statements of Operations...................................................36
Statements of Changes in Net Assets........................................37
Notes to Financial Statements..............................................38
FINANCIAL HIGHLIGHTS.........................................................42
REPORT OF INDEPENDENT ACCOUNTANTS............................................44
<PAGE>
THE STRONG ADVANTAGE FUND
COMPARED TO OUR BENCHMARK, WE MANAGE THE FUND MORE CONSERVATIVELY FROM A
DURATION STANDPOINT, AND SEEK OUTPERFORMANCE THROUGH CAREFUL ISSUE AND SECTOR
SELECTION.
The Strong Advantage Fund seeks current income with a very low degree of
share-price fluctuation. The Fund invests primarily in ultra short-term,
investment-grade debt obligations, and its average effective maturity will
normally be one year or less.
STRONG PERFORMANCE CONTINUED
The Strong Advantage Fund demonstrated strong performance for the fiscal year
ended February 28, 1998. During this period, the Fund ranked #8 of the 26
ultra-short obligation funds ranked by Lipper Analytical Services. Within that
same group, it ranked #1 based on total return for the 5-year and
since-inception periods out of 9 and 4 funds, respectively.(1)
=========================================
PORTFOLIO STATISTICS
=========================================
As of 2-27-98
30 DAY ANNUALIZED YIELD(2) 6.23%
AVERAGE EFFECTIVE MATURITY(3) 0.81 YEARS
AVERAGE QUALITY RATING(4) A
=========================================
The Fund's average annual total return for the fiscal year was 6.26%, which
compares favorably with the 6.19% return of its benchmark index for the same
period.* The Strong Advantage Fund seeks to outperform the average money fund
by about 0.75% to 1.00% over a market cycle, although, unlike a money fund the
Advantage Fund's share price will vary. The Fund also has a slightly longer
maturity, and may invest in lower-quality bonds than money funds can.
========================================================
ASSET ALLOCATION
========================================================
Based on net assets as of 2-28-98
[PIE CHART]
Corporate Bonds 58.2%
Non-Agency Mortgage and Asset-Backed Securities 26.0%
U.S. Government and Agency Issues 10.2%
Short-Term Investments 3.5%
Preferred Stocks 2.1%
This allocation does not reflect any futures positions
held by the Fund.
========================================================
LOOKING BACK
The US economy remained strong throughout the Fund's fiscal year, even during
times of turbulence in the Asian markets. Higher productivity levels led to
stable consumer prices, offsetting historically low unemployment levels and
improving wage growth. This balance served to keep the Federal Reserve on hold
after the late-March 0.25% hike in short-term interest rates. The Fed's
inactivity helped keep short-term interest rates stable, leading to a gradual
flattening of the yield curve, and subsequently a smaller difference between
short- and long-term rates. From a pure yield perspective, this trend made
short-term bonds more attractive. As the Fund's fiscal year drew to a close,
indications were that the Fed would remain on hold, with the Fed Funds Rate
(the rate that banks can borrow money overnight) standing at 5.5%.
MAINTAINING A PROVEN STRATEGY
We gradually lowered the Fund's exposure to BB rated bonds during the second
half of the Fund's fiscal year. We began the period with about 25% of the
Fund's assets in these higher-yielding, lower quality bonds, but gradually
lowered our holdings to about 17% as a cautionary measure against the effects
of the "Asian flu" on the US economy.
We reduced our BB rated exposure easily, replacing a number of these cushion
bonds--corporate bonds that are likely to be called back and repaid by the
company in the near future--with higher-quality securities as the cushions were
called. As an example, we purchased Panamsat, a satellite company, after our
careful analysis determined that the credit fundamentals were strong. The
company was acquired by GM Hughes, a higher-rated company, and the bonds were
called at a premium in December. Our portfolio benefited from this move with
both a higher yield and price appreciation.
Another sector we've followed closely is mortgage-backed securities. We were
overweighted during the first fiscal-year quarter, and carefully adjusted the
Fund's exposure throughout the year--in turn both reducing and increasing our
holdings as the value of these securities shifted relative to underlying
Treasury securities. The Fund has also benefited from holdings in the airline
sector, both in corporate bonds and en-hanced equipment trust certificates,
which are bonds backed by the actual aircraft themselves. This sector did well,
since it was able to maintain pricing power as oil prices came down and the
strong economy led to increased business and pleasure travel.
We held the Fund's duration at 0.5 to 0.6 for the fiscal year, while the
duration of our benchmark was at 0.9. Compared to our benchmark, we manage the
Fund more conservatively from a duration standpoint, and seek outperformance
through careful issue and sector selection.
2
<PAGE>
THE MARKET AHEAD APPEARS STRONG
We expect the US economy to hold strong in the months ahead, with the lingering
effects of Asian market instability reducing the Gross Domestic Product by 1/2
to 1%. This will allow the Fed to hold interest rates at their current level.
There is a possibility that inflation may creep into the economy, which may
lead to a 0.25% interest-rate hike to keep growth in check. Overall, though,
the market is poised to continue trading in a range, and volatility should
remain low. We anticipate that any Fed activity will be isolated, and expect
that over the longer term interest rates will head lower.
We're expecting a strong environment for mortgages and corporate bond products,
and are positioning the Fund to take advantage of both. We'll continue to
carefully research corporate bonds for any evidence of Asian exposure. We
intend to maintain our BB rated exposure comfortably below the Fund's maximum
to reduce risk, especially from further effects of Asian instability. Instead,
we will look for opportunities in higher-quality sectors, or sectors that
benefit from the continued strong US economy.
Thank you for your confidence in the Strong Advantage Fund.
[PHOTO OF JEFFREY A. KOCH AND LYLE J. FITTERER]
Sincerely,
/s/ Jeffrey A. Koch
Jeffrey A. Koch
/s/ Lyle J. Fitterer
Lyle J. Fitterer
Portfolio Co-managers
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 11-25-88 to 2-28-98
[GRAPH]
THE STRONG 1-Year Lipper Ultra
ADVANTAGE Treasury Short Obligation
FUND Bill* Average*
10-88 10,000 10,000 10,000
12-88 10,103 10,039 10,079
12-89 11,052 11,050 11,006
12-90 11,784 12,036 11,872
12-91 13,036 13,088 12,726
12-92 14,135 13,720 13,260
12-93 15,250 14,245 13,812
12-94 15,793 14,621 14,229
12-95 16,978 15,804 15,194
12-96 18,112 16,698 16,020
12-97 19,290 17,719 16,937
2-98 19,479 17,885 17,087
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index ("1-Year Treasury
Bill") and the Lipper Ultra Short Obligation Average. Results include the
reinvestment of all dividends and capital gains distributions. Performance is
historical and does not represent future results. Investment returns and
principal value will vary, and you may have a gain or loss when you sell
shares. To equalize the time periods, the indexes' performance was prorated
for the month of November 1988.
===============================================================================
==============================
AVERAGE ANNUAL
TOTAL RETURNS
==============================
As of 2-28-98
1-YEAR 6.26%
3-YEAR 6.94%
5-YEAR 6.23%
SINCE INCEPTION 7.46%
(on 11-25-88)
==============================
* The Salomon Brothers 1-Year Treasury Benchmark-on-the-Run Index ("1-Year
Treasury Bill") is an unmanaged index generally representative of the average
yield on One-Year Treasury Bills. The Lipper Ultra Short Obligation Average
represents funds that invest at least 65% of their assets in investment-grade
debt issues, or better, and maintain a portfolio dollar-weighted average
maturity between 91 days and 365 days. Source of the Salomon index data is
Standard & Poor's Micropal. Source of the Lipper index data is Lipper
Analytical Services, Inc.
1 The since inception ranking is based on performance from 11-30-88 to 2-28-98
for ultra short obligation funds tracked by Lipper. From time to time, the
Fund's advisor has waived its management fee, which has resulted in higher
returns.
2 Yield is annualized for the 30 days ended 2-27-98, is historical, and will
vary.
3 The Fund's average effective maturity includes the effect of futures,
options, and when-issued securities.
4 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
3
<PAGE>
THE STRONG MUNICIPAL ADVANTAGE FUND
ALTHOUGH WE SEEK TO OFFER AN ATTRACTIVE TAX-EXEMPT YIELD, WE ALSO KNOW THAT
MANY OF OUR INVESTORS USE THIS FUND TO ADDRESS SHORTER-TERM NEEDS.
The Strong Municipal Advantage Fund seeks federally tax-exempt current income
with a very low degree of share-price fluctuation. The Fund invests primarily
in ultra-short-term, investment-grade municipal obligations and normally
maintains an average effective maturity of one year or less.
The Strong Municipal Advantage Fund is the first mutual fund to combine the
benefits of ultra-short bonds with the tax advantages of municipal investing.
Unlike money funds, which seek to maintain a $1.00 share price, the Fund does
allow for a small degree of share-price fluctuation. This allows it to pursue
higher yields and returns than tax-free money funds.
========================================
PORTFOLIO STATISTICS
========================================
As of 2-27-98
[PIE CHART]
30-DAY ANNUALIZED YIELD(2) 3.92%
AVERAGE EFFECTIVE MATURITY(3) 0.9 YEARS
AVERAGE QUALITY RATING(4) A
========================================
CONTINUED STRONG PERFORMANCE
For the year ended February 28, 1998, Lipper Analytical Services, Inc. ranked
the Fund #7 out of 29 short-term municipal debt funds based on total return. For
the period since the Fund's inception, it ranked #3 out of 29 funds. We believe
those high rankings are all the more notable because the Fund is ranked in a
group of funds with average maturities of up to three years, considerably
longer than our own.(1) Our unique investment approach means there is no Lipper
category that neatly matches our investment style.
As of February 27, 1998, the Fund's 30-day current yield stood at 3.92%.(2) For
investors in the 36% tax bracket, the taxable equivalent yield was 6.13%. The
Fund has continued to exceed municipal money market yields by about 50 basis
points. That's an attractive premium for investors who don't require absolute
stability of principal.
===============================================================================
EQUIVALENT TAXABLE YIELDS
===============================================================================
As of 2-27-98
YOUR TAX-EXEMPT EFFECTIVE
MARGINAL YIELD OF 3.92% IS EQUIVALENT
JOINT RETURN SINGLE RETURN TAX RATE TO A TAXABLE YIELD OF:
- -------------------------------------------------------------------------------
$42,351-102,300 $25,351-61,400 28.0% 5.44%
...............................................................................
$102,301-155,950 $61,401-128,100 31.0% 5.68%
...............................................................................
$155,951-278,450 $128,101-278,450 36.0% 6.13%
...............................................................................
Over $278,450 Over $278,450 39.6% 6.49%
...............................................................................
The chart reflects 1998 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $124,500
should consult their tax advisor to determine their actual 1998 marginal tax
rate. The Fund's income may be subject to state and local taxes and, depending
on your tax status, the Alternative Minimum Tax.
===============================================================================
A FOCUS ON LIQUIDITY
In the past year, we were able to keep the Fund's NAV within a narrow range.
Although we seek to offer an attractive tax-exempt yield, we also know that many
of our investors use this Fund to address shorter-term needs.
One way we maintain the Fund's liquidity and keep fluctuation very mild is to
keep about one third of the Fund's assets in debt securities that mature daily
or weekly. We anticipate maintaining this positioning going forward. It serves
as a steadying force and helps to keep share-price fluctuation low.
THE MARKETS THIS PAST YEAR
Early in the fiscal year, interest rates for both short- and long-term bonds
moved upward. From a starting point of 5.67%, yields on one-year T-bills rose to
as high as 6.06% in April. From that point on, rates stayed in a general
downward trend, bottoming out at 5.08% in January, then rising to 5.40% by the
time the Fund closed its fiscal year in February.
In this environment, we sought to enhance return by keeping the Fund's maturity
near the long end of its one-year range. This positioning, complemented by our
emphasis on liquidity, allowed us to sustain a competitive level of income
without incurring undue risk.
We also have continued to work with smaller, regional brokerages as well as
large, established Wall Street firms. Because these specialized brokers don't
have the same high profile as some of their larger competitors, the issues they
sponsor often offer higher yields in order to attract investor attention.
Issues whose income may be subject to the Alternative Minimum Tax still make up
a significant part of the portfolio. As AMT paper represents an ever-increasing
proportion of the municipal market, to reject these issues would cut our
shareholders off from many of the market's more attractive securities. We are
conscious of the tax implications for some of our shareholders, but believe
that overall the benefits outweigh the costs.
4
<PAGE>
A CHANGE TO THE PROSPECTUS
We are still very conscious of preserving the overall quality of this Fund,
keeping its average credit rating at A. Further, we currently have invested 44%
of assets in bonds from the two highest levels of credit quality. However,
effective January 1, 1998, the prospectus allows us to invest up to 10% of
assets in non-investment-grade issues. Our investment philosophy at this time
has kept our exposure lower than that. They currently make up just 2% of
assets.
THE OUTLOOK FOR THE YEAR AHEAD
It's not easy to tell exactly what's on the horizon for interest rates. The
economy has proven to be more robust than expected, so any easing of rates by
the Federal Reserve is likely to be put off for a while. Nonetheless, it's hard
to believe the so-called Asian flu won't have some impact in the U.S. That
said, unless interest rates become unusually volatile, we don't anticipate
making significant changes to our investment approach.
We appreciate the confidence our shareholders have shown us in our first two
years of operation. The Fund continues to enjoy strong cash inflows, with
assets under management now topping $1 billion. We have been able to continue
to find a sufficient supply of municipal securities that in combination fit our
ultra-short mandate, deliver attractive yield, and satisfy our demand for
quality. We are dedicated to canvassing the market in our continued pursuit of
these three objectives.
We thank you for the opportunity to serve your investment needs, and look
forward to helping you pursue your financial goals for years to come.
[PHOTO OF STEVEN D. HARROP]
Sincerely,
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
===============================================================================
GROWTH OF AN ASSUMED $10,000 INVESTMENT
===============================================================================
From 11-30-95 to 2-28-98
[GRAPH]
THE STRONG Lehman Lipper
MUNICIPAL Brothers Short Municipal
ADVANTAGE Municipal 1-Year Debt Funds
FUND Bond Index* Index*
11-95 10,000 10,000 10,000
12-95 10,086 10,038 10,041
6-96 10,272 10,226 10,159
12-96 10,577 10,474 10,386
6-97 10,831 10,701 10,595
12-97 11,117 10,960 10,854
2-98 11,195 11,056 10,939
This graph, provided in accordance with SEC regulations, compares a $10,000
investment in the Fund, made at its inception, with similar investments in the
Lehman Brothers Municipal 1 Year Bond Index and the Lipper Short Municipal Debt
Funds Index. Results include the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment returns and principal value vary, and you may have a gain
or loss when you sell shares.
===============================================================================
===============================
AVERAGE ANNUAL
TOTAL RETURNS
===============================
As of 2-28-98
1-YEAR 4.99%
SINCE INCEPTION 5.15%
(on 11-30-95)
===============================
* The Lehman Brothers Municipal 1 Year Bond Index is an unmanaged index
generally representative of one-year, tax-exempt bonds. The Lipper Short
Municipal Debt Funds Index is an equally-weighted performance index of the
largest qualifying funds in this Lipper category. Source of the Lehman index
data is Standard & Poor's Micropal. Source of the Lipper index data is
Lipper Analytical Services, Inc.
1 The ranking is based on performance from 3-1-96 to 2-28-98 for Short
Municipal Debt Funds tracked by Lipper. From time to time, the Fund's Advisor
has waived its management fee, which has resulted in higher returns. Source:
Lipper Analytical Services, Inc.
2 Yield is annualized for the 30 days ended 2-27-98, is historical, and will
vary. The Fund's Advisor has waived its management fee of 0.07% and absorbed
expenses of 0.05%. Otherwise, current yield would have been 3.80% and returns
would have been lower.
3 The Fund's average effective maturity includes the effect of when-issued
securities.
4 For purposes of this average rating, the Fund's short-term debt obligations
have been assigned a long-term rating by the Advisor.
5
<PAGE>
THE STRONG HERITAGE MONEY FUND
OUR CAREFUL RESEARCH UNCOVERED SECURITIES THAT PROVIDED ATTRACTIVE YIELDS,
WHILE MAINTAINING HIGH CREDIT STANDARDS.
The Strong Heritage Money Fund seeks current income, a stable share price, and
daily liquidity. The Fund invests in corporate, bank, and government
instruments that present minimal credit risk.(1)
ANOTHER YEAR OF OUTPERFORMANCE
The Strong Heritage Money Fund continued to deliver strong performance for the
fiscal year ended February 28, 1998. During this time, Lipper Analytical
Services, Inc. ranked the Fund #2 out of 263 money funds since inception, and
#4 out of 306 money funds for the 1-year period, based on total return.(2)
A STABLE YEAR FOR SHORT RATES
Short-term interest rates were unusually stable during the Fund's fiscal year,
March 1, 1997 to February 28, 1998. The Federal Reserve raised the Fed Funds
Rate (the overnight rate for banks borrowing money) from 5.25% to 5.50% in
late March of 1997. This preemptive move came as the Fed feared an overheating
economy in response to vigorous economic growth. Rates then held steady through
the end of 1997, when they were bumped up by the "over-the-turn" phenomenon--
the annual attempts by some corporate borrowers to show cash on year-end
balance sheets by issuing short-term debt.
===============================
YIELD SUMMARY(3)
===============================
As of 2-27-98
7-DAY CURRENT YIELD 5.40%
7-DAY EFFECTIVE YIELD 5.54%
AVERAGE MATURITY 48 DAYS
===============================
During the Fund's fiscal year, commercial paper traded within a fairly narrow
range of .42%, with an average yield of 5.55%. Longer-term securities
experienced more choppiness in response to the conflicting forces of powerful
economic growth and the lingering effects of the Asian financial crisis. The
end result was a gradual flattening of the yield curve--which means that the
spread between short-term and long-term yields narrowed.
CAREFUL ISSUE SELECTION IS THE KEY
The stable short-term interest rate environment precluded us from adding value
to the Fund through duration management throughout most of 1997. We held a
neutral average maturity through early December, while positioning the Fund to
roll-off several existing holdings and reinvest the money into 1998 at inflated
rates brought about by the year-end phenomenon described above. We also held
the Fund to a near-maximum position in asset-backed commercial paper at
year-end 1997 to take advantage of the yield premium these securities offered.
6
<PAGE>
The principal way we've added value to the Fund is through issue selection. Our
careful research uncovered securities that provided attractive yields, while
maintaining high credit standards.
LITTLE CHANGE IN RATES EXPECTED
We anticipate that the Federal Reserve will remain on hold for the near future,
while the effects of the Asian crisis on the US economy are still uncertain.
Even with minimal direct consequences for domestic markets, the devaluation of
Asian currency will probably serve as a cap on inflationary pressure in an
otherwise robust US economy, encouraging the Fed to resist hiking interest
rates. As a result, we expect to hold average maturity close to a neutral
stance in the near term, and position the Fund to take advantage of changes in
rates that reflect an unwarranted belief in Fed policy change.
Thank you for your investment in the Strong Heritage Money Fund. We appreciate
your confidence, and look forward to serving your investment needs in the
future.
[PHOTO OF JAY N. MUELLER]
Sincerely,
/s/ Jay N. Mueller
Jay N. Mueller
Portfolio Manager
============================
3-MONTH TREASURY BILL YIELDS
============================
Through 2-28-98
[GRAPH]
2-97 5.21%
3-97 5.32%
4-97 5.23%
5-97 4.93%
6-97 5.16%
7-97 5.23%
8-97 5.21%
9-97 5.09%
10-97 5.19%
11-97 5.19%
12-97 5.34%
1-98 5.17%
2-98 5.31%
Source: Bloomberg
============================
1 Investments in the Fund are neither insured nor guaranteed by the U.S.
government. There can be no assurance that the Fund will be able to maintain
its stable net asset value of $1.00 per share.
2 The since inception ranking is based on performance from 6-29-95 to 2-28-98
for ultra short obligation funds tracked by Lipper. From time to time, the
Fund's advisor has waived its management fee, which has resulted in higher
returns.
3 Yields are annualized for the 7-day period ended 2-27-98. Effective yields
reflect the compounding of income. Yields and rankings are historical and do
not represent future results. Yields will fluctuate. The Fund's Advisor
temporarily waived 0.20% in management fees and absorbed 0.06% in expenses
for the Fund. Otherwise, the Fund's current yield would have been 5.14%, and
its effective yield would have been 5.27%.
7
<PAGE>
THE STRONG MUNICIPAL MONEY MARKET FUND
EVEN AS WE CONSIDER A BROADER RANGE OF MUNICIPAL MONEY MARKET INSTRUMENTS, WE
CONTINUE TO PLACE HEAVY EMPHASIS ON LIQUIDITY.
The Strong Municipal Money Market Fund seeks federally tax-exempt current
income, a stable share price, and daily liquidity. The Fund invests in
high-quality, short-term municipal obligations that present minimal credit
risk.(1)
===============================
YIELD SUMMARY(3)
===============================
As of 2-27-98
7-DAY CURRENT YIELD 3.37%
7-DAY EFFECTIVE YIELD 3.42%
AVERAGE MATURITY 46 DAYS
===============================
Our goal is to provide a steady stream of tax-exempt income, consistent with
our objective of a stable share price and daily liquidity. This Fund can offer
a conservative vehicle for a portion of an investor's assets while still
making a contribution to the returns of a balanced portfolio.
CONTINUED OUTPERFORMANCE
As of February 27, 1998, the Municipal Money Market Fund's 7-day current yield
was 3.37%. Its 7-day effective yield--which reflects compounding--was 3.42%.
For investors in the 36% tax bracket, that translates into a taxable equivalent
current yield of 5.27%.
That strong yield has helped the Fund to continue its history of high rankings
from Lipper Analytical Services, Inc. For the year ended February 28, 1998, the
Fund earned a #1 ranking among 134 tax-exempt money-market funds tracked by
Lipper. The Fund also received #1 rankings for the five-year, ten-year, and
since-inception periods (out of 97, 65, and 56 funds, respectively).(2)
We believe that these rankings indicate to shareholders that this Fund is
managed with the aim of consistent excellence over the short and long term.
A LOOK BACK AT THE YEAR'S MARKETS
Early in the fiscal year, interest rates for both short- and long-term bonds
moved upward. From a starting point of 5.67%, yields on one-year T-bills rose
to as high as 6.06% in April. From that point on, rates stayed in a general
downward trend, with occasional pauses along the way. One-year T-bill rates
bottomed out at 5.08% in January, then rose slightly to 5.40% as the Fund
closed its fiscal year in February.
In this generally declining interest-rate environment--particularly in the
second half of the fiscal year--rates on money market issues remained largely
unchanged. Both supply and demand applied upward pressure on money market
rates,helping to keep them steady despite the broader rate declines.
Over the year, we kept the Fund's maturity longer than the market average. This
positioning, while always well within traditional money-market range, helped us
to maintain a competitive yield for the Fund. This remains a very conservative
Fund, but we do seek out appropriate opportunities to add to the yield we
deliver to shareholders.
FACTORS IN OUR SUCCESS
In addition to adopting a longer than average maturity stance, we also seek to
enhance yield by working with smaller, regional brokerages along with large,
leading Wall Street firms. This is a tactic that has worked well for us in the
past, and continues to do so. In order to attract investor attention, the
issues these specialized firms sponsor often offer slightly higher yields than
do those from larger, better-known firms.
We also consider issues subject to the Alternative Minimum Tax. That doesn't
mean we disregard the tax implications of these issues for our shareholders who
are subject to the AMT. However, we believe that by considering AMT paper and
selecting what we believe to be the best of these issues for the portfolio, we
can add more value--even taking taxes into account--than would be possible if
we rejected AMT issues completely.
CONTINUING TO PRESERVE LIQUIDITY
Even as we consider a broader range of municipal money market instruments, we
continue to place heavy emphasis on liquidity. That's because we know that
while tax-exempt income is important to our shareholders, people turn to money
market funds as a reservoir of cash. To that end, we keep about 65% of assets
in daily and weekly issues--which can be readily converted to cash to meet
investors' needs for liquidity.
8
<PAGE>
Because of the relatively low yields daily issues offer, we limit that position
to an amount ample to meet daily demands. Weekly issues are almost as liquid,
but deliver slightly higher yield to the Fund and its shareholders.
OUR OUTLOOK FOR THE YEAR AHEAD
It's not easy to tell exactly what's on the immediate horizon for interest
rates. The economy has proven to be more robust than expected, so any easing
ofrates by the Federal Reserve is likely to be put off for a while.
Nonetheless,it's hard to believe the Asian flu won't have some impact in the
U.S. The difficulties in that region suggest that we can expect some domestic
economic slowing in the future, which could lead to a decline in interest
rates.
Unless interest rates become unusually volatile, we don't anticipate
making any significant changes to our approach. We will likely keep our average
maturity moderately longer than market levels, and will continue to incorporate
issues from regional brokerages as well as AMT paper. The aim of all of these
steps is to identify and purchase the municipal money market securities that
can best serve our shareholders.
We'd like to thank our shareholders for their support, both those who've joined
us recently and those who've been with us for a while. We look forward to
continuing to help you pursue your important financial goals.
[PHOTO OF STEVEN D. HARROP]
Sincerely,
/s/ Steven D. Harrop
Steven D. Harrop
Portfolio Manager
===============================================================================
EQUIVALENT TAXABLE YIELDS
===============================================================================
As of 2-28-98
YOUR TAX-EXEMPT EFFECTIVE
MARGINAL YIELD OF 3.42% IS EQUIVALENT TO
JOINT RETURN SINGLE RETURN TAX RATE A TAXABLE YIELD OF:
- -------------------------------------------------------------------------------
$42,351-102,300 $25,351-61,400 28.0% 4.75%
...............................................................................
$102,301-155,950 $61,401-128,100 31.0% 4.96%
...............................................................................
$155,951-278,450 $128,101-278,450 36.0% 5.34%
...............................................................................
Over $278,450 Over $278,450 39.6% 5.66%
===============================================================================
The chart reflects 1998 marginal federal tax rates before limitations and
phase-outs. Individuals with adjusted gross income in excess of $124,500
should consult their tax advisor to determine their actual 1998 marginal tax
rate. The Fund's income may be subject to state and local taxes and, depending
on your tax status, the Alternative Minimum Tax.
- -------------------------------------------------------------------------------
1 An investment in the Fund is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that the Fund will be able to
maintain a stable share price of $1.00.
2 The since-inception ranking is based on performance from 10-31-86 to 2-28-98
for Tax-Exempt Money Market funds tracked by Lipper. From time to time, the
Fund's Advisor has waived its management fee, which has resulted in higher
returns. Source: Lipper Analytical Services, Inc.
3 Yields are annualized for the 7 days ended 2-27-98, are historical, and will
vary. Effective yield assumes reinvested income.
9
<PAGE>
THE STRONG STEP 1(SM) MONEY FUND
[PHOTO OF JAY N. MUELLER]
THE FUND IS DESIGNED TO HELP INVESTORS TAKE THE FIRST STEP TOWARD BUILDING A
DIVERSIFIED INVESTMENT PORTFOLIO.
The Strong Step 1 Money Fund seeks current income, a stable share price, and
daily liquidity. The Fund is designed to help investors take the first step
toward building a diversified investment portfolio.
During the one-month period since its inception on January 31, 1998, the Strong
Step 1 Money Fund offered investors an attractive yield. In fact, for the 7-day
period ended 2/24/98, IBC's Money Fund Report(R),-- a service of IBC Financial
Data, Inc.--ranked Strong Step 1 Money Fund #1 among 233 General Purpose money
funds. The advisor is waiving management fees and absorbing expenses until at
least August 1, 1998, which helps maintain a higher yield.(1)
=================================
YIELD SUMMARY(2)
=================================
As of 2-27-98
7-DAY CURRENT YIELD 5.79%
7-DAY EFFECTIVE YIELD 5.96%
AVERAGE MATURITY 57 DAYS
=================================
After nearly a year of inactivity by the Federal Reserve resulting in
relatively stable short-term interest rates the Fund benefited from a modest
rise in short-term rates during February--its first month of operation. We also
added value to the Fund through careful issue selection. Our careful research
uncovered securities that provided attractive yields while maintaining high
credit standards.
LITTLE CHANGE IN RATES EXPECTED
We anticipate that the Federal Reserve will remain on hold for the near
future--keeping short-term interest rates at a steady level--while the effects
of the Asian crisis on US economy are still uncertain. Even with minimal direct
consequences for domestic markets, the devaluation of Asian currency will
probably serve as a cap on inflationary pressure in an otherwise robust US
economy, encouraging the Fed to resist hiking interest rates. As a result, we
expect to hold average maturity close to a neutral stance in the near term, and
position the Fund to take advantage of changes in rates that reflect an
unwarranted belief in Fed policy change.
Thank you for your investment in the Strong Step 1 Money Fund. We appreciate
your confidence, and look forward to serving your investment needs in the
future.
Sincerely,
/s/ Jay N. Mueller
Jay N. Mueller
Portfolio Manager
================================
3-MONTH TREASURY BILL YIELDS
================================
Through 2-28-98
[GRAPH]
2-97 5.21%
3-97 5.32%
4-97 5.23%
5-97 4.93%
6-97 5.16%
7-97 5.23%
8-97 5.21%
9-97 5.09%
10-97 5.19%
11-97 5.19%
12-97 5.34%
1-98 5.17%
2-98 5.31%
Source: Bloomberg
================================
1 Investments in the Fund are neither insured nor guaranteed by the U.S.
government. There can be no assurance that the Fund will be able to
maintain its stable net asset value of $1.00 per share.
2 Yields are annualized for the 7-day period ended 2-27-98. Effective yields
reflect the compounding of income. Yields and rankings are historical and do
not represent future results. Yields will fluctuate. The Fund's Advisor
temporarily waived 0.50% in management fees and absorbed 0.78% in expenses
for the Fund. Otherwise, the Fund's current yield would have been 4.51%, and
its effective yield would have been 4.61%.
10
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
STRONG ADVANTAGE FUND
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
CORPORATE BONDS 58.0%
Advance Bank Australia Floating Rate
Subordinated Notes, 6.6875%, Due 3/14/06 $15,000,000 $15,018,750
Amerco Asset-Backed Bonds, 6.65%, Due 10/15/99
(Acquired 1/14/98; Cost $5,008,900) (b) 5,000,000 4,988,500
Anchor Bancorp, Inc. Senior Notes, 8.9375%,
Due 7/09/03 7,500,000 7,781,250
Atlas Air, Inc. Pass-Thru Trust Certificates,
12.25%, Due 12/01/02 9,800,000 10,845,072
BTC Capital Trust I Floating Rate Notes, 6.6563%,
Due 12/30/26 30,000,000 29,382,000
Bank of Boston Capital Trust III Floating Rate
Capital Securities, 6.6875%, Due 6/15/27 10,000,000 9,884,990
Bank of Ireland Perpetual Floating Rate Junior
Subordinated Notes, 6.9375%, Due 9/29/49 5,000,000 4,995,500
Bay View Capital Corporation Senior Debentures,
8.42%, Due 6/01/99 (Acquired 10/15/97;
Cost $6,108,000) (b) 6,000,000 6,101,424
Building Materials Corporation Senior Deferred
Coupon Notes, Series B, Zero %, Due 7/01/04
(Rate Reset Effective 7/01/99) 7,000,000 6,737,500
Caesars World, Inc. Senior Subordinated
Debentures, 8.875%, Due 8/15/02 1,700,000 1,765,875
California Federal Bank Linked Restructured
Asset Certificates with Enhanced Returns,
Series 1997-C-5-5, 8.375%, Due 4/01/99
(Acquired 5/05/97; Cost $14,225,000) (b) 14,225,000 14,260,562
Call-net Enterprises, Inc. Senior Discount Notes,
Zero %, Due 12/01/04 (Rate Reset Effective
12/01/99) 8,965,000 8,382,275
Chase Capital II Floating Rate Notes, 6.1523%,
Due 2/01/27 8,000,000 7,695,832
Chase Manhattan Corporation Floating Rate Notes,
6.0625%, Due 12/30/09 45,920,000 44,450,560
Citicorp Floating Rate Notes:
6.50%, Due 5/01/04 6,172,000 6,200,570
Series W, 5.8125%, Due 11/27/35 10,000,000 9,150,000
Series X, 5.725%, Due 11/27/35 10,000,000 9,150,000
Cleveland Electric Linked Restructured Asset
Certificates with Enhanced Returns,
Series 1997-C-X, 7.1344%, Due 6/01/01
(Acquired 7/14/97; Cost $18,000,000) (b) 18,000,000 18,000,000
Contifinancial Corporation Senior Notes, 7.50%,
Due 3/15/02 14,220,000 13,892,983
Continental Airlines, Inc. Pass-Thru Certificates:
Series 981A, 6.648%, Due 3/15/17 2,000,000 1,991,880
Series 981B, 6.748%, Due 9/15/17 3,900,000 3,900,234
Corestates Capital II Floating Rate Subordinated
Capital Income Securities, 6.2438%, Due 1/15/27
(Acquired 5/14/97; Cost $9,852,500) (b) 10,000,000 9,819,400
Cort Furniture Rental Corporation Senior Notes,
12.00%, Due 9/01/00 15,570,000 17,127,000
Delta Air Lines, Inc. Pass-Thru Trust Certificates,
Series 1993-A2, 10.50%, Due 4/30/16 11,601,000 15,376,893
Dime Bancorp, Inc. Senior Notes, 10.50%,
Due 11/15/05 56,472,000 60,566,220
Ferrellgas LP/Ferrellgas Financial Corporation
Senior Notes, 10.00%, Due 8/01/01 24,600,000 26,076,000
First Empire Capital Trust II Capital Securities,
8.277%, Due 6/01/27 8,000,000 8,512,632
First Maryland Capital I Variable Rate
Subordinated Capital Income Securities,
6.5938%, Due 1/15/27 19,500,000 19,767,520
First Nationwide Holdings, Inc. Senior Exchange
Notes, 12.25%, Due 5/15/01 13,995,000 15,709,387
Fort Howard Corporation Trust Pass-Thru
Certificates, Series 1991, 11.00%, Due 1/02/02 6,420,326 7,062,358
HSB Capital I Floating Rate Securities, Series A,
6.5038%, Due 7/15/27 9,000,000 8,875,638
Harrahs Operating, Inc. Guaranteed Senior
Subordinated Notes, 8.75%, Due 3/15/00 9,600,000 9,783,936
Health & Retirement Properties Trust Reset Notes,
6.1414%, Due 7/09/07 20,000,000 20,090,000
Healthsouth Corporation Senior Subordinated
Notes, 9.50%, Due 4/01/01 19,385,000 20,402,713
Heritage Media Services, Inc. Senior Secured Notes,
11.00%, Due 6/15/02 5,305,000 5,550,356
Huntington Capital I Variable Rate Capital Income
Securities, 6.3289%, Due 2/01/27 28,500,000 27,709,581
Huntsman Polymers Corporation Senior Notes,
11.75%, Due 12/01/04 3,796,000 4,303,715
Imperial Capital Trust I Guaranteed Capital
Securities, 9.98%, Due 12/31/26 5,300,000 6,048,922
Indspec Chemical Corporation Senior Subordinated
Discount Notes, Series B, Zero %, Due 12/01/03
(Rate Reset Effective 12/01/98) 32,571,000 32,896,710
JP Morgan & Company, Inc. Subordinated Notes,
8.00%, Due 5/30/05 1,400,000 1,403,749
Lehman Brothers LIBOR Indexed Trust
Certificates, Series 1997-C-5-1, 7.1875%, Due
6/15/00 (Acquired 4/24/97; Cost $20,000,000) (b) 20,000,000 20,050,000
Long Island Lighting Company Debentures,
8.90%, Due 7/15/19 22,000,000 23,428,812
Long Island Lighting Company General and
Refunding Bonds, 8.625%, Due 4/15/04 10,000,000 10,100,490
Marine Midland Bank Floating Rate Notes,
6.125%, Due 12/31/09 21,460,000 20,837,660
Mashantucket Western Pequot Tribe Special
Revenue Bonds, Series A, 6.1589%, Due 9/01/12
(Acquired 9/16/97; Cost $30,000,000) (b) 30,000,000 30,000,000
Mercantile Capital Trust I Floating Rate Pass-Thru
Securities, 6.5023%, Due 2/01/27 10,000,000 9,999,890
Mohegan Tribal Gaming Authority Connecticut
Senior Secured Notes, Series B, 13.50%,
Due 11/15/02 20,605,000 26,683,475
NBD Bancorp, Inc. Subordinated Floating Rate
Notes, 6.25%, Due 12/18/05 18,530,000 18,460,235
NTC Capital Trust II Floating Rate Capital
Securities, 6.1838%, Due 4/15/27 23,805,000 23,191,069
NWCG Holdings Corporation Senior Secured
Discount Notes, Series B, Zero %, Due 6/15/99 27,000,000 25,008,750
National Commerce Capital Trust Floating Rate
Pass-Thru Securities, 6.7925%, Due 4/01/27 15,000,000 14,945,235
National Westminster Bank Floating Rate Notes,
6.425%, Due 9/29/49 (Acquired 11/30/95 - 9/24/96;
Cost $34,344,556) (b) 34,500,000 34,344,750
Newscorp Overseas Limited Floating Rate Debt
Unit with Swap Agreement (Structured
Enhanced Return Trusts 1995, Series R-27),
6.8063%, Due 6/30/99 (Acquired 6/12/95;
Cost $27,120,000) (b) 28,250,000 25,425,000
North Fork Bancorp Capital Trust Pass-Thru
Securities, 8.70%, Due 12/15/26 8,500,000 9,063,763
Okobank Subordinated Step-Up Perpetual Floating
Rate Notes, 7.0281%, Due 10/29/49 550,000 554,813
Old Kent Capital Trust I Subordinated Floating
Rate Capital Income Securities, 6.4523%,
Due 2/01/27 16,000,000 15,658,816
Paramount Communications, Inc. Notes, 7.50%,
Due 1/15/02 20,000,000 20,491,660
Salomon Brothers, Inc. Medium Term Floating
Rate Notes, 6.2063%, Due 9/30/03 4,400,000 4,400,000
Santa Fe Energy Resources, Inc. Senior
Subordinated Debentures, 11.00%, Due 5/15/04 15,920,000 17,273,200
11
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
A mount (Note 2)
- -------------------------------------------------------------------------------
Socgen Real Estate LLC Bonds, 7.64%,
Due 12/29/49 (Rate Reset Effective 10/01/07)
(Acquired 8/21/97; Cost $5,750,000) (b) $ 5,750,000 $ 5,661,697
Spintab AB Floating Rate Subordinated Notes,
6.475%, Due 12/29/49 (Acquired 11/21/97;
Cost $50,000,000) (b) 50,000,000 50,115,850
Star Capital Trust I Floating Rate Securities,
6.7025%, Due 6/15/27 15,000,000 14,838,015
Stop & Shop Companies, Inc. Senior Subordinated
Notes, 9.75%, Due 2/01/02 5,000,000 5,591,865
Suntrust Capital II Trust Floating Rate Pass-Thru
Securities, 7.90%, Due 6/15/27 1,330,000 1,402,309
Swedbank Floating Rate Debt Unit (Medium Term
Structured Enhanced Return Trusts 1996):
Series R-34, 6.525%, Due 11/10/02
(Acquired 5/23/96; Cost $25,000,000) (b) 25,000,000 24,750,000
Series R-35, 6.475%, Due 11/10/02
(Acquired 10/16/96; Cost $20,000,000) (b) 20,000,000 19,800,000
System Energy Resources, Inc. First Mortgage
Bonds, 11.375%, Due 9/01/16 395,000 425,649
Time Warner, Inc. Pass-Thru Asset Trust Securities:
4.90%, Due 7/29/99 (Acquired 11/21/97;
Cost $73,062,750) (b) 75,000,000 73,626,300
Series 1997-1, 6.10%, Due 12/30/01
(Acquired 1/08/97; Cost $22,896,000) (b) 24,000,000 23,700,720
Triangle Pacific Corporation Senior Notes, 10.50%,
Due 8/01/03 10,080,000 10,659,600
Trident NGL, Inc. Subordinated Notes, 10.25%,
Due 4/15/03 2,500,000 2,662,500
UCAR Global Enterprises, Inc. Senior Subordinated
Notes, 12.00%, Due 1/15/05 1,060,000 1,195,150
Union Planters Capital Trust Securities, 8.20%,
Due 12/15/26 15,000,000 15,933,060
Viacom International, Inc. Reset Notes, 8.75%,
Due 5/15/01 (Rate Reset Effective 5/15/98) 24,815,000 25,241,322
Videotron Holdings PLC Senior Discount Notes,
Zero %, Due 7/01/04 (Rate Reset
Effective 7/01/99) 49,435,000 47,828,363
Westpoint Stevens, Inc. Senior Notes, 8.75%,
Due 12/15/01 29,000,000 30,305,000
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $1,248,555,578) 1,255,313,505
- ------------------------------------------------------------------------------
NON-AGENCY MORTGAGE & ASSET-BACKED SECURITIES 26.0%
AFC Mortgage Loan Trust Variable Rate
Asset-Backed Certificates, Series 1994-1,
Class 2A-1, 7.7595%, Due 5/25/25 2,105,147 2,151,692
AMRESCO Commercial Mortgage Funding I Corporation
Variable Rate Depositor Mortgage Pass-Thru
Certificates, Series 1997-1, 7.5496%, Due 9/26/27
(Acquired 12/11/97; Cost $9,198,225) (b) 9,218,390 9,201,152
BTC Mortgage Investors Trust Secured Notes,
Series 1997-S1, Class A, 6.255%, Due 12/31/09
(Acquired 1/13/98; Cost $6,131,508) (b) 6,936,984 6,947,806
CS First Boston Mortgage Securities Corporation
Variable Rate Mortgage Pass-Thru Certificates:
Series 1994-MHC1, Class C, 6.7016%, Due 4/25/11 4,185,922 4,201,620
Series 1994-MHC1, Class D, 7.3016%, Due 4/25/11 5,200,000 5,252,000
California Federal Bank, A Federal Savings Bank
of Los Angeles, Variable Rate Mortgage
Pass-Thru Certificates, Series 1988 PAL-1,
Class A, 7.5489%, Due 2/25/18 1,959,434 1,959,434
Cargill Lease Receivables Trust Senior Lease
Backed Certificates, Series 1996-A, Class A-2,
6.43%, Due 12/20/05 9,262,485 9,276,934
Chase Mortgage Finance Corporation Mortgage
Pass-Thru Certificates, Series 1990-G, Class
A-Z1, 9.50%, Due 12/25/21 1,685,898 1,727,523
Chase Mortgage Finance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1992-3, Class B7, 7.8055%, Due 10/28/23 1,399,006 1,409,499
Series 1992-3, Class B8, 7.8055%, Due 10/28/23 2,801,714 2,822,727
Citicorp Mortgage Securities, Inc. Adjustable Rate
Real Estate Mortgage Investment Conduit
Pass-Thru Certificates, Series 1992-7, Class 10,
7.253%, Due 3/25/22 5,667,678 5,752,693
Collateralized Mortgage Obligation Trust, Series 14,
Class Z, 8.00%, Due 1/01/17 1,719,693 1,742,900
Contimortgage Home Equity Loan Trust Interest
Only Pass-Thru Certificates, Series 1997-5,
Class A11, 25.00%, Due 6/15/99 44,547,564 7,503,592
ContiSecurities Residual Corporation
ContiMortgage Net Interest Margin Notes,
Series 1997-A, 7.23%, Due 7/16/28
(Acquired 9/18/97; Cost $7,441,500) (b) 7,441,500 7,441,500
DLJ Mortgage Acceptance Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1990-2, Class A, 7.525%, Due 1/25/22 7,704,018 7,877,358
Series 1991-3, Class A1, 7.3778%, Due 2/20/21 1,082,415 1,102,710
Series 1994-Q16, Class 1A1, 8.882%, Due 1/25/25 9,706,646 9,900,779
DLJ Mortgage Acceptance Corporation Variable
Rate Multifamily Mortgage Pass-Thru
Certificates, Series 1992-MF10, Class A-1,
7.5938%, Due 12/22/02 5,681,119 5,681,119
Equipment Pass-Thru Investment Certificates Trust
Floating Rate Senior Certificates, Series 1996-1:
Class A, 6.875%, Due 9/25/09 (Acquired 6/14/96;
Cost $4,850,000) (b) 4,850,000 4,874,250
Class B, 7.625%, Due 9/25/09 (Acquired 7/01/96;
Cost $5,335,000) (b) 5,335,000 5,375,012
Class C, 10.875%, Due 9/25/03 (Acquired 6/28/96;
Cost $4,618,984) (b) 4,550,723 4,732,752
The Equitable Life Assurance Society of the United
States Collateralized Floating Rate Notes,
Series D-2, 6.675%, Due 5/15/03 (Acquired
5/23/96 - 10/30/97; Cost $12,021,016) (b) 12,000,000 12,072,000
Fleet Finance Home Equity Trust Home Equity
Loan Certificates, Series 1991-2, Class B, 8.65%,
Due 10/15/06 5,550,000 5,609,052
Franchise Finance Corporation of America
Floating Rate Notes, Series 1997-1:
Class D2, 6.6938%, Due 7/18/13
(Acquired 6/04/97; Cost $5,726,000) (b) 5,726,000 5,726,000
Class E2, 6.9438%, Due 1/18/14
(Acquired 6/04/97; Cost $2,290,000) (b) 2,290,000 2,290,000
Fund America Investors Corporation Variable Rate
Senior Pass-Thru Certificates, Series 1993-A,
Class A-1, 7.6049%, Due 6/25/23 16,146,329 16,683,436
Glendale Federal Bank Variable Rate Mortgage
Pass-Thru Certificates, Series 1990-3, Class A-1,
7.2172%, Due 3/25/30 3,135,631 3,186,585
Glendale Federal Bank Variable Rate Senior
Pass-Thru Mortgage Securities, Series 1990-1,
Class A, 7.2949%, Due 10/25/29 1,792,827 1,817,478
Great Western Bank, A Federal Savings Bank of
Beverly Hills, Adjustable Rate Mortgage
Pass-Thru Certificates, Series 1988-3, Class A,
6.34%, Due 12/25/17 4,638,973 4,638,973
Greenwich Capital Acceptance, Inc. Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-1,
Class A, 7.323%, Due 2/25/21 (Acquired 4/18/96 -
6/23/97; Cost $23,962,892) (b) 23,445,461 24,002,291
12
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Greenwich Capital Trust I, Class A, 7.273%, Due
2/15/21 (Acquired 3/04/97; Cost $9,222,963) (b) $ 8,863,352 $ 9,195,728
Homart Pooled Asset Financial Trust Floating
Rate Collateral Trust Certificates:
Class A-3, 7.6563%, Due 12/29/01
(Acquired 12/21/93; Cost $10,000,000) (b) 10,000,000 10,000,000
Class A-4, 8.4062%, Due 12/29/01
(Acquired 2/09/95; Cost $9,987,500) (b) 10,000,000 10,000,000
Kmart CMBS Financing, Inc. Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1997-1, Class D, 6.725%, Due 3/01/07
(Acquired 2/21/97 - 3/10/97; Cost $15,020,625) (b) 15,000,000 15,000,000
Malan Mortgage Securities Trust Floating Rate
Commercial Mortgage Pass-Thru Certificates,
Series 1995-1, Class A2A, 6.425%, Due 8/15/05
(Acquired 2/21/97; Cost $4,010,000) (b) 4,000,000 4,006,880
Merrill Lynch Credit Corporation Floating Rate
Pass-Thru Asset-Backed Mortgage Loans:
Series 1996-C, Class B, 6.875%, Due 9/15/21
(Acquired 5/09/97; Cost $1,159,032) (b) 1,350,165 1,159,036
Series 1996-D, Class B, 7.3255%, Due 5/15/25 7,938,000 6,737,377
Merrill Lynch Credit Corporation Subordinated
Mortgage-Backed Certificates, Series 95-S1,
Class A-1, 6.625%, Due 2/17/24
(Acquired 12/22/97; Cost $4,770,312) (b) 5,000,000 4,742,200
Merrill Lynch Home Equity Acceptance, Inc.
Subordinated Variable Rate Mortgage-Backed
Certificates, Series 1994-A, Class A-1, 6.625%,
Due 8/17/23 10,425,929 10,328,238
Merrill Lynch Mortgage Investors, Inc. Senior
Subordinated Variable Rate Pass-Thru
Certificates, Series 1994-A, Class M, 7.125%,
Due 2/15/19 11,000,000 11,110,000
Merrill Lynch Mortgage Investors, Inc. Variable
Rate Commercial Mortgage Pass-Thru
Certificates, Series 97-SD1:
Class D, 6.325%, Due 4/01/10 (b) 3,500,000 3,500,000
Class E, 6.625%, Due 4/01/10 (b) 2,500,000 2,500,000
The Money Store, Inc. Securitized Net Interest
Margin Trust 1997-1 Notes, 7.36%, Due 6/20/25
(Acquired 12/23/97; Cost $4,908,407) (b) 4,908,407 4,908,407
Morgan Stanley Mortgage Trust Variable Rate
Collateralized Mortgage Obligation, Series 35,
Class 35-2, Interest Only, 7,042.25%, Due 4/20/21 2,875 467,257
Nomura Depositor Trust Floating Rate Commercial
Mortgage Pass-Thru Certificates, Series 1998-ST1:
Class A3, 6.205%, Due 1/15/03 (Acquired
1/30/98; Cost $14,500,000) (b) 14,500,000 14,509,135
Class A4, 6.525%, Due 1/15/03 (Acquired
1/30/98 - 2/10/98; Cost $32,021,875) (b) 32,000,000 32,040,000
Class A5, 6.875%, Due 1/15/03 (Acquired
1/30/98; Cost $6,300,000) (b) 6,300,000 6,303,969
OUC Commercial Mortgage Securities, Inc.
Adjustable Rate Subordinated Mortgage
Securities, Series 1998-1, Class C, 7.5473%, Due
1/25/28 (Acquired 2/12/98; Cost $8,413,224) (b) 8,387,015 8,396,157
Perpetual Savings Bank Variable Rate Mortgage
Pass-Thru Certificates, Series 1991-1, Class B1,
7.7255%, Due 6/25/19 (Acquired 9/17/96;
Cost $1,154,406) (b) 1,142,446 1,155,298
Prudential Home Mortgage Securities Company
Mortgage Pass-Thru Certificates, Series 1992-18,
Class M, 8.50%, Due 7/25/22 15,082,290 15,678,915
Prudential Home Mortgage Securities Company
Variable Rate Mortgage Pass-Thru Certificates,
Series 1988-1, Class A, 7.8009%, Due 4/25/18 1,539,099 1,577,577
Prudential Home Thirty-Year Mortgage Trust
Subordinated Mortgage Securities, Series 1992-A,
Class 1B1, 7.20%, Due 4/28/22 (Acquired 12/12/96;
Cost $119,799) (b) 119,799 119,499
RTC Adjustable Rate Mortgage Loan Pass-Thru
Certificates, Series 1991-1, Class
A-1, 7.2435%, Due 4/26/21 14,772,449 14,911,014
RTC Mortgage Pass-Thru Securities, Inc.
Commercial Certificates:
Series 1992-C7, Class C, 9.25%, Due 6/25/23 1,178,980 1,182,245
Series 1995-C2, Class B, 6.80%, Due 5/25/27 22,977,375 23,063,540
RTC Mortgage Pass-Thru Securities, Inc. Mortgage
Pass-Thru Certificates, Series 92-18P, Class B-5,
7.50%, Due 1/25/21 (Acquired 9/10/97;
Cost $1,624,067) (b) 1,618,000 1,626,090
RTC Mortgage Pass-Thru Securities, Inc.,
Series 1995-2, Class A-1A, 6.70%, Due 5/25/29 157,318 156,915
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc. Commercial Pass-Thru Certificates,
Series 1994-C2, Class E, 8.00%, Due 4/25/25 12,266,002 12,565,906
RTC Variable Rate Mortgage Pass-Thru
Securities, Inc.:
Series 1992-4, Class B-2, 7.4927%, Due 7/25/28 4,376,187 4,512,943
Series 1992-6, Class A-3, 7.7102%, Due 1/25/26 9,733,467 9,724,415
Series 1992-6, Class B-9, 6.5475%, Due 11/25/26 3,034,334 3,049,506
Series 1992-15, Class B-7, 7.0175%, Due 7/25/27 1,000,000 1,002,190
Series 1992-17, Class A2, 7.6056%, Due 4/25/20 4,559,755 4,577,903
Series 1992-C1, Class B, 7.6875%, Due 8/25/23 1,000,381 1,012,886
Series 1993-1P, Class A-2, 7.30%, Due 8/25/19
(Acquired 2/05/98; Cost $5,943,273) (b) 5,935,853 5,928,433
Series 1993-3, Class A6, 8.2044%, Due 7/25/22 2,988,703 3,055,471
Series 1995-1, Class B-5, 6.8309%, Due 10/25/28 18,509,685 18,741,056
Series 1995-1, Class B-11, 7.2875%, Due 10/25/28 3,052,653 3,094,627
Residential Funding Mortgage Securities II, Inc.
Variable Rate Interest Only Home Equity Loan
Pass-Thru Certificates, Series 1996-HS2,
Class A, 1.70%, Due 9/25/12 38,240,943 872,276
Ryland Mortgage Securities Corporation III
Collateralized Mortgage Bonds, Series 1992-C,
Class 3-A, 7.65%, Due 11/25/30 7,424,003 7,419,400
Ryland Mortgage Securities Corporation IV
Variable Rate Collateralized Mortgage Bonds,
Series 2, Class 3-A, 11.9668%, Due 6/25/23 796,407 835,981
Ryland Mortgage Securities Corporation Senior
Mortgage Partnership Variable Rate Securities,
89-1, Class 1A, Perpetual Savings Bank, 7.7329%,
Due 2/25/19 661,742 661,120
Ryland Mortgage Securities Corporation Variable
Rate Mortgage Participation Securities:
Series 1990-C1, Class A, 6.3483%, Due 10/25/20 (f) 45,776,970 45,905,603
Series 1992-3, Class A-2, 7.5082%, Due 6/25/20 13,681,535 13,728,052
Salomon Brothers Mortgage Securities VII, Inc.
Variable Rate Mortgage Pass-Thru Certificates,
Series 1992-4, Class A2, 8.1294%, Due 9/25/22 3,448,985 3,514,722
Santa Barbara Savings & Loan Association
California Real Estate Mortgage Investment
Conduit Participation Certificates, Series 1988-A,
Class 2, Principal Only, Due 9/01/18 947,207 737,344
Saxon Mortgage Securities Corporation Mortgage
Partnership Securities, Series 1993-8,
Class 1A-1, 7.375%, Due 9/25/23 9,026,764 9,122,665
Sears Mortgage Securities Corporation Variable
Rate Mortgage Pass-Thru Certificates:
Series 1992-21, Class A2, 7.5891%, Due 12/26/22 1,507,491 1,531,260
Series 1992-23, Class A-4, 7.2553%, Due 10/25/22 1,741,105 1,752,527
13
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG ADVANTAGE FUND (CONTINUED)
Shares or
Principal Value
Amount (Note 2)
===============================================================================
Structured Asset Securities Corporation Variable
Rate Multiclass Pass-Thru Certificates, Series
1996-C1:
Class D, 6.9688%, Due 10/25/10 (Acquired
9/27/96; Cost $1,964,147) (b) $ 1,974,334 $ 1,973,406
Class E, 7.2188%, Due 10/25/10 (Acquired
9/27/96; Cost $2,689,288) (b) 2,710,976 2,709,702
U-Haul Self-Storage Corporation Commercial
Mortgage Asset Trust Variable Rate Pass-Thru
Certificates, Series 1993-1, Class A1, 7.15%,
Due 12/01/20 (Acquired 12/02/93; Cost $679,992)(b) 679,992 679,992
Western Federal Savings & Loan Association
Marina Del Rey California Variable Rate
Mortgage Pass-Thru Certificates, Series 1991-4,
Class A, 7.343%, Due 7/01/21 6,022,749 6,118,752
- ------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE & ASSET-BACKED
SECURITIES (COST $557,774,439) 562,164,482
- ------------------------------------------------------------------------------
UNITED STATES GOVERNMENT & AGENCY ISSUES 10.2%
FHLMC Participation Certificates:
7.50%, Due 8/01/04 42,434,928 43,256,892
9.00%, Due 1/01/05 thru 9/15/20 30,589,341 32,717,801
10.50%, Due 11/01/20 1,444,272 1,603,474
10.75%, Due 10/01/00 58,781 61,697
11.00%, Due 10/01/00 thru 9/01/20 1,447,022 1,610,602
11.75%, Due 5/01/11 thru 6/01/11 1,277,927 1,436,232
12.00%, Due 9/01/11 thru 2/01/15 508,662 580,300
12.25%, Due 7/01/15 897,033 1,019,890
12.50%, Due 2/01/15 155,327 179,019
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Pass-Thru Certificates:
8.00%, Due 3/25/21 13,830,482 14,292,987
8.75%, Due 9/25/20 5,080,629 5,327,085
9.00%, Due 1/01/13 thru 6/01/24 80,215,861 85,513,762
9.50%, Due 3/01/10 6,655,722 7,144,452
9.75%, Due 3/25/20 11,114,612 11,819,534
13.50%, Due 9/01/14 17,186 20,521
FNMA Guaranteed Real Estate Mortgage
Investment Conduit Variable Rate Pass-Thru
Certificates, 7.792%, Due 12/01/17 4,132,892 4,282,048
GNMA Guaranteed Pass-Thru Certificates:
10.00%, Due 10/20/17 9,824,277 10,935,697
13.50%, Due 8/15/14 thru 11/15/14 120,348 143,043
15.00%, Due 5/15/12 thru 9/15/12 34,285 41,877
- ------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT & AGENCY ISSUES (COST $221,700,022) 221,986,913
- ------------------------------------------------------------------------------
OPTIONS 0.2%
Merrill Lynch Swaption (The option to receive a
fixed interest rate of 7.75%; exercisable at a
strike price of $100 beginning 4/09/04 and
expiring 4/09/25.) 32,666,667 3,498,600
- ------------------------------------------------------------------------------
TOTAL OPTIONS (COST $1,512,573) 3,498,600
- ------------------------------------------------------------------------------
PREFERRED STOCKS 2.1%
Banco Central Hispanoamericano, SA Eurocap,
8.2375% 600,000 15,000,000
California Federal Bank, A Federal Savings Bank,
Los Angeles, Series B 10.625% 10,000 1,107,500
Ford Motor Company Deposit Shares Representing
1/2000 Share, Class B 8.25% 588,225 18,161,447
NB Capital Corporation 8.35% Exchangeable
(Acquired 8/22/97; Cost $5,000,000) (b) 5,000 5,247,500
Pinto Totta International Finance, Ltd. 7.77%
(Acquired 7/24/97; Cost $5,000,000) (b) 5,000 5,218,750
- -------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $44,739,238) 44,735,197
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 4.1%
COMMERCIAL PAPER 0.0%
INTEREST BEARING, DUE UPON DEMAND
General Mills, Inc., 5.23% $ 180,000 180,000
Johnson Controls, Inc., 5.23% 200,400 200,400
Wisconsin Electric Power Company, 5.21% 484,000 484,000
--------------
864,400
CORPORATE BONDS 0.6%
Residential Reinsurance, Ltd. Floating Rate Notes,
11.4397%, Due 12/15/98 (Acquired 6/10/97;
Cost $1,000,000) (b) 1,000,000 1,014,380
Rogers Communications, Inc. Floating Rate Debt
Unit with Premium Call (Medium Term
Structured Enhanced Return Trusts 1995,
Series R-25), 8.7133%, Due 6/21/98
(Acquired 5/15/95; Cost $12,000,000) (b) 12,000,000 12,000,000
--------------
13,014,380
REPURCHASE AGREEMENTS 3.4%
ABN-AMRO Chicago Corporation (Dated 2/27/98),
5.60%, Due 3/02/98 (Proceeds $68,832,107);
Collateralized by: $55,694,000 United States
Treasury Strips, Zero %, Due 5/31/98 - 2/15/19
(Market Value $56,896,635) and $13,106,000
United States Treasury Notes, 5.75%,
Due 11/15/00 (Market Value $13,369,094) (d) 68,800,000 68,800,000
Firstar Bank Milwaukee (Dated 2/27/98), 4.25%,
Due 3/02/98 (Proceeds $4,101,452); Collateralized
by: $4,050,000 United States Treasury Notes,
6.50%, Due 4/30/99 (Market Value $4,185,675) (d) 4,100,000 4,100,000
--------------
72,900,000
UNITED STATES GOVERNMENT ISSUES 0.1%
United States Treasury Bills, Due 3/05/98 thru
5/21/98 (c) 2,935,000 2,925,310
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $89,689,727) 89,704,090
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES (COST $2,163,971,577) 100.6% 2,177,402,787
Other Assets and Liabilities, Net (0.6%) (13,756,991)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $2,163,645,796
==============================================================================
FUTURES
- -------------------------------------------------------------------------------
Underlying Unrealized
Expiration Face Amount Appreciation
Date at Value (Depreciation)
- -------------------------------------------------------------------------------
Purchased:
20 Ten-Year U.S. Treasury Notes 3/98 $ 2,253,750 ($ 16,400)
Sold:
422 Two-Year U.S. Treasury Notes 3/98 87,802,375 (411,978)
1,014 Five-Year U.S. Treasury Notes 3/98 110,605,219 (945,878)
64 Five-Year U.S. Treasury Notes 6/98 6,980,000 (5,175)
299 Ten-Year U.S. Treasury Notes 6/98 33,674,875 161,180
537 U.S. Treasury Bonds 6/98 64,691,719 392,429
14
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
MUNICIPAL BONDS 35.6%
ARKANSAS 0.8%
Fayetteville, Arkansas Public Facilities Board
Refunding and Improvement Revenue -
Butterfield Trail Village Project, 9.50%, Due
9/01/14 (Pre-Refunding at $102 on 9/01/99) $ 3,385,000 $ 3,731,962
Little Rock, Arkansas Collateralized IDR -
Lexicon, Inc. Project, 6.48%, Due 7/01/06 4,385,000 4,434,331
-----------
8,166,293
CALIFORNIA 1.4%
California Hospital Revenue - Valley Health System
Refunding and Improvement Project, 5.50%,
Due 5/15/00 740,000 751,100
Long Beach, California Harbor Revenue, 7.25%,
Due 5/15/19 2,550,000 2,618,034
Santa Ana, California Community Redevelopment
Refunding, 7.50%, Due 9/01/16 2,000,000 2,115,000
Stanislaus, California Waste-To-Energy Financing
Agency Solid Waste Facility Revenue Refunding -
Ogden Martin System, Inc. Project, 7.625%,
Due 1/01/10 (f) 2,195,000 2,348,650
Vallejo, California BAN - Water Improvement
Project, 4.75%, Due 7/15/99 6,675,000 6,733,406
-----------
14,566,190
COLORADO 0.8%
Arapahoe County, Colorado SFMR - IDK Partners I
Trust Pass-Thru Certificates, 5.25%,
Due 11/01/19 (f) 4,195,602 4,216,580
Central City, Gilpin County, Colorado Excise Tax
Refunding, 5.40%, Due 12/01/00 3,300,000 3,370,125
-----------
7,586,705
CONNECTICUT 2.6%
Connecticut Development Authority Airport
Facilities Revenue - Roncari Associates, Inc.
Project, 7.25%, Due 12/01/99 2,042,257 2,060,128
Connecticut HFA Housing Mortgage Finance
Program, 7.30%, Due 11/15/03 3,475,000 3,644,406
Connecticut Resources Recovery Authority Revenue -
American REF-FUEL Company of Southeastern
Connecticut Project, 8.00%, Due 11/15/15 18,285,000 19,285,921
Norwich, Connecticut Tax-Exempt Equipment
Lease, 6.35%, Due 8/01/01 1,610,051 1,674,454
-----------
26,664,909
DISTRICT OF COLUMBIA 1.0%
District of Columbia Revenue - Georgetown
University Project, 7.25%, Due 4/01/20 10,000,000 10,223,900
FLORIDA 2.0%
Hillsborough County, Florida EFA Revenue -
The University of Tampa Project,6.70%,
Due 12/01/16 15,110,000 15,525,525
Pasco County, Florida Solid Waste Disposal and
Resource Recovery System Revenue, 5.00%,
Due 4/01/99 4,200,000 4,251,576
-----------
19,777,101
IDAHO 0.5%
Boise, Idaho Housing Authority Revenue - Hobbler
Place Project, 5.25%, Due 2/01/02 4,790,000 4,855,863
ILLINOIS 2.2%
Alton, Illinois Hospital Facilities Revenue and
Refunding - St. Anthony's Health Center Project:
4.95%, Due 9/01/99 1,400,000 1,408,750
5.00%, Due 9/01/01 850,000 855,312
5.15%, Due 9/01/00 1,355,000 1,370,244
Hodgkins, Illinois GO Tax Allocation, 9.50%,
Due 12/01/09 (Pre-Refunding at $104 on 12/01/01) 2,600,000 3,152,500
Illinois DFA MFHR - Town and Garden Apartments
Project, 7.20%, Due 9/01/08 2,250,000 2,421,562
Illinois Health Facilities Authority Revenue
Refunding - Westlake Community Hospital
Project, 7.875%, Due 1/01/13 4,450,000 4,654,522
Kane, McHenry, Cook and DeKalb Counties, Illinois
Community Unit School District Number 300 GO
Lease Secured COP - School Building Project,
6.90%, Due 12/01/04 3,685,000 4,007,437
Romeoville, Will County, Illinois COP:
7.30%, Due 12/01/99 2,250,000 2,337,188
7.30%, Due 12/01/00 2,000,000 2,120,000
-----------
22,327,515
INDIANA 0.8%
East Chicago, Indiana School City COP, 5.50%,
Due 7/15/02 2,975,000 3,071,687
Fishers, Indiana First Mortgage EDR - United
Student Aid Funds, Inc. Project, 8.375%,
Due 9/01/14 3,250,000 3,378,180
Huntington, Indiana EDR Refunding - Quanex
Corporation Project, 6.50%, Due 8/01/10 1,665,000 1,719,679
-----------
8,169,546
IOWA 0.5%
Cedar Rapids, Iowa First Mortgage Revenue -
Cottage Grove Place Project, 7.25%, Due 7/01/02 5,000,000 5,130,500
KANSAS 0.1%
Kansas City, Kansas Residual Revenue Capital
Appreciation, Zero %, Due 5/01/12 1,805,000 615,956
KENTUCKY 1.1%
Kentucky EDFA Hospital System Refunding and
Improvement Revenue - Appalachian Regional
Healthcare, Inc. Project:
4.50%, Due 10/01/99 2,005,000 2,012,519
4.70%, Due 10/01/00 2,085,000 2,100,638
4.85%, Due 10/01/01 2,195,000 2,216,950
5.00%, Due 10/01/02 2,300,000 2,331,625
5.10%, Due 10/01/03 2,165,000 2,202,887
-----------
10,864,619
LOUISIANA 0.7%
Louisiana Public Facilities Authority Hospital
Revenue and Refunding - Pendleton Memorial
Methodist Hospital Project,6.75%, Due 6/01/10 3,060,000 3,300,975
Ouachita Parish, Louisiana IDB, Inc. Revenue
Refunding - Physicians and Surgeons Medical
Complex Project, 4.80%, Due 8/01/02 3,750,000 3,815,625
-----------
7,116,600
MASSACHUSETTS 0.8%
Commonwealth of Massachusetts Department of
Revenue Tax-Exempt Master Equipment Lease:
5.085%, Due 10/01/00 1,578,516 1,606,140
5.40%, Due 9/30/99 . 3,137,349 3,207,940
5.62%, Due 10/01/01 2,230,182 .... 2,299,876
Massachusetts Industrial Finance Agency Industrial
Revenue - John T. Spinelli Project, 7.00%,
Due 11/01/00 899,277 899,278
-----------
8,013,234
MICHIGAN 0.3%
Detroit, Michigan EDC Resource Recovery Revenue,
7.00%, Due 5/01/01 2,950,000 3,167,562
15
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group,
5.60%, Due 8/01/99 $ 200,000 $ 202,250
-----------
3,369,812
MINNESOTA 1.0%
Minneapolis, Minnesota Temporary Parking
Ramp Revenue, 4.75%, Due 6/01/00 5,885,000 5,894,593
Plymouth, Minnesota Revenue Refunding -
Carlson Center Project, 7.00%, Due 4/01/12 3,815,000 3,967,600
-----------
9,862,193
MISSISSIPPI 0.4%
Jones County, Mississippi Hospital Revenue
Refunding - South Central Regional
Medical Center Project, 5.00%, Due 12/01/03 4,130,000 4,207,438
MISSOURI 0.1%
Springfield, Missouri Land Clearance
Redevelopment Authority Industrial Revenue -
University Plaza Project, 5.90%, Due 10/01/01 1,125,000 1,146,094
NEBRASKA 2.5%
Energy America Gas Supply Revenue -
Metropolitan Utilities District Project,5.30%,
Due 4/01/05 18,661,329 18,964,576
Omaha Tribe of Nebraska Public Improvements
Authority GO, 7.50%, Due 12/01/02 5,850,000 5,974,429
-----------
24,939,005
NEVADA 0.7%
Clark County, Nevada Airport Improvement
Revenue Airport System Improvements, 8.25%,
Due 7/01/15 5,000,000 5,166,100
Henderson, Nevada Local Improvement Districts
Number T-4, 6.00%, Due 11/01/01 475,000 486,281
Reno-Sparks, Nevada Convention and Visitors
Authority Limited Obligation Refunding, 6.25%,
Due 11/01/01 1,540,000 1,595,825
-----------
7,248,206
NEW JERSEY 2.0%
New Jersey EDA Senior Mortgage Revenue - Arbor
Glen of Bridgewater Project:
6.00%, Due 5/15/26 1,750,000 1,753,448
7.00%, Due 5/15/06 11,525,000 11,679,781
South Amboy, New Jersey Housing Authority
Housing Revenue - Shore Gate Village Grand
Project, 6.00%, Due 8/15/99 6,500,000 6,511,375
-----------
9,944,604
NEW YORK 0.9%
New York Energy Research and Development
Authority State Service Contract
Revenue - Western New York Nuclear Service
Center Project, 5.50%, Due 4/01/99 4,325,000 4,393,811
New York Medical Care Facilities Finance Agency
Revenue Hospital and Nursing Home Mortgage,
8.00%, Due 2/15/27 5,080,000 5,194,808
-----------
9,588,619
OHIO 1.1%
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 3/15/99 610,000 625,543
6.53%, Due 9/15/99 630,000 651,262
Lucas County, Ohio Hospital Revenue Refunding -
Riverside Hospital Project, 7.625%, Due 6/01/15 2,400,000 2,442,240
Ohio Department of Transportation COP -
Rickenbacker Port Project, 6.125%, Due 4/15/15 1,150,000 1,206,063
Ohio Township, Allegheny County, Pennsylvania
GO, 5.15%, Due 11/15/00 1,785,000 1,838,550
Youngstown, Ohio City School District Energy
Conservation Measures, 6.80%, Due 3/15/05 4,515,000 4,831,050
-----------
11,594,708
OREGON 0.9%
Clackamas County, Oregon Hospital Facility
Authority Revenue and Refunding -
Willamette View, Inc. Project, 5.40%, Due 11/01/02 1,540,000 1,588,125
Multnomah County, Oregon Educational Facilities
Refunding and Revenue - University of Portland
Project, 4.75%, Due 4/01/01 2,940,000 2,987,775
Portland, Oregon Housing Authority Tax Credit
Notes - Yards at Union Station Project, 5.00%,
Due 7/15/99 2,265,000 2,279,156
Portland, Oregon MFHR - Civic Stadium Housing
Project, 4.60%, Due 8/01/99 2,000,000 2,012,500
-----------
8,867,556
PENNSYLVANIA 3.2%
Montgomery County, Pennsylvania IDA First
Mortgage Revenue Refunding - The Meadowood
Corporation Project, 5.15%, Due 12/01/03 1,500,000 1,503,750
Philadelphia, Pennsylvania Airport Revenue
Refunding - Philadelphia Airport
System Project, 5.50%, Due 6/15/01 (f) 2,000,000 2,072,500
Philadelphia, Pennsylvania Hospitals and Higher
Education Facilities Authority
Revenue, 8.375%, Due 6/01/04 1,665,000 1,800,281
Philadelphia, Pennsylvania Municipal Authority
Equipment Revenue, 5.297%, Due 10/01/04 18,000,000 19,012,500
Scranton, Lackawanna County, Pennsylvania Health
and Welfare Authority Hospital Revenue - Moses
Taylor Hospital Project, 5.25%, Due 7/01/02 4,750,000 4,850,937
Titusville, Crawford County, Pennsylvania GO,
5.00%, Due 4/15/99 3,500,000 3,548,125
-----------
32,788,093
SOUTH CAROLINA 1.3% -
Charleston County, South Carolina First Mortgage
Health Facilities Revenue - The Episcopal Church
Home Project, 5.40%, Due 4/01/04 8,100,000 8,191,125
Charleston County, South Carolina Industrial
Revenue Refunding - Coburg Dairy, Inc. Project,
6.875%, Due 10/01/06 1,400,000 1,430,506
Greystone, South Carolina Tax-Exempt Asset Trust
Pass-Thru Certificates, 4.30%, Due 6/20/00 3,742,894 3,742,894
-----------
13,364,525
TENNESSEE 2.1%
Tennessee Housing Development Agency -
Homeownership Program, Zero %, Due 7/01/12 41,955,000 20,872,612
TEXAS 2.1%
Dallas-Fort Worth, Texas International Airport
Facilities Improvement Corporation Revenue -
American Airlines, Inc. Project, 7.50%,
Due 11/01/25 11,450,000 12,451,875
Falcons Lair Utility and Reclamation District COP,
6.25%, Due 10/15/99 4,000,000 4,020,000
Houston, Texas Airport System Subordinate Lien
Revenue Refunding:
5.25%, Due 7/01/00 (f) 2,230,000 2,282,962
5.25%, Due 7/01/01 (f) 2,350,000 2,417,562
-----------
21,172,399
16
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
UTAH 0.4%
Salt Lake City, Utah Redevelopment Agency
Central Business District Neighborhood
Redevelopment Tax Increment Revenue
Refunding, 4.75%, Due 10/01/02 $ 4,200,000 $ 4,257,750
WASHINGTON 1.1%
Lynnwood, Snohomish County, Washington Local
Improvement District Number 93-1 BAN, 4.60%,
Due 10/01/99 5,000,000 5,020,100
Skagit and Whatcom Counties, Washington Public
Hospital District Number 304 Revenue and
Refunding - Affiliated Health Services, 4.90%,
Due 12/01/02 3,210,000 3,262,163
Skagit County, Washington Public Hospital District
Number 1 Revenue and Refunding - Affiliated
Health Services, 4.90%, Due 12/01/02 2,415,000 2,454,244
------------
10,736,507
WEST VIRGINIA 0.2%
Kanawha County, West Virginia County Commission
IDR - Union Carbide Chemicals and Plastics
Company, Inc. Project, 8.00%, Due 8/01/20 1,930,000 2,103,700
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (COST $354,259,894) 360,142,752
- ------------------------------------------------------------------------------
VARIABLE RATE PUT BONDS 6.9%
CALIFORNIA 0.8%
Santa Rosa, California Housing Authority MFHR -
Dutton Partners Project, 4.85%, Due 9/01/07
(Putable at $100 and Rate Reset Effective 9/01/02) 3,000,000 3,005,580
Vallejo, California Housing Authority MFMR -
Highlands Apartments Project, 5.00%,
Due 6/01/07 (Putable at $100 and Rate Reset
Effective 6/01/99) 4,640,000 4,649,280
------------
7,654,860
COLORADO 0.3%
Colorado Health Facilities Authority Revenue
EXTRAS - Baptist Home Association of the
Rocky Mountains, Inc. Project, 5.75%, Due 8/15/27
(Putable at $100 and Rate Reset Effective 8/15/02) 3,000,000 3,105,000
FLORIDA 2.0%
Escambia County, Florida Housing Corporation
Housing Revenue:
Royal Arms Project, 7.00%, Due 7/01/17
(Putable at $100 and Rate Reset Effective 7/01/99) 9,360,000 9,465,300
Wellington Arms Project, 7.375%, Due 9/01/16
(Putable at $100 and Rate Reset Effective 9/01/99) 10,650,000 10,836,375
Florida Housing Finance Agency MFHR - Cypress
Lake Apartment Project, 5.75%, Due 12/01/07
(Putable at $100 and Rate Reset Effective 12/01/02) 200,000 206,500
------------
20,508,175
GEORGIA 0.3%
Decatur County, Georgia Bainbridge IDA IDR -
John B. Sanfilippo & Son, Inc. Project, 5.375%,
Due 6/01/17 (Putable at $100 and Rate Reset
Effective 6/01/02) 3,000,000 3,030,000
ILLINOIS 1.7%
Chicago, Illinois MFHR - Chicago Beach Apartments
Project, 5.50%, Due 2/01/17 (Putable at $100 and
Rate Reset Effective 2/01/02) 2,985,000 3,001,507
Illinois Health Facilities Authority Revenue
EXTRAS - Covenant Retirement Communities,
Inc. Project, 5.25%, Due 12/01/22 (Putable at
$100 and Rate Reset Effective 12/01/02) 3,500,000 3,591,875
Robbins, Illinois Resource Recovery Revenue
Refunding - Robbins Resource Recovery
Partners, 4.90%, Due 10/15/17 (Putable at $100
and Rate Reset Effective 10/15/02) 10,000,000 10,262,500
------------
16,855,882
MAINE 0.6%
Maine Finance Authority MFHR - Back Bay Tower
Project, 5.25%, Due 9/01/18 (Putable at $100 and
Rate Reset Effective 9/01/99) 5,935,000 6,009,188
OHIO 0.1%
Lorain County, Ohio IDR - Gilford Instrument
Laboratories, Inc. Project, 5.25%, Due 7/01/14
(Putable at $100 and Rate Reset Effective 7/01/99) 1,000,000 1,018,750
PENNSYLVANIA 0.5%
Chester County, Pennsylvania Health and Education
Facilities Authority Revenue - Barclay Friends
Project, 4.90%, Due 8/01/25 (Putable at $100 and
Rate Reset Effective 8/01/99) 2,500,000 2,537,500
Montgomery County, Pennsylvania IDA First
Mortgage Revenue Refunding EXTRAS - The
Meadowood Corporation Project, 5.50%,
Due 12/01/19 (Putable at $100 and Rate Reset
Effective 12/01/02) 3,000,000 3,015,000
------------
5,552,500
SOUTH CAROLINA 0.3%
Charleston County, South Carolina First Mortgage
Health Facilities Revenue - The Episcopal Church
Home Project, 5.30%, Due 4/01/27 (Putable at
$100 and Rate Reset Effective 10/01/02) 3,000,000 3,056,250
TENNESSEE 0.2%
Shelby County, Tennessee Health, Educational and
Housing Facility Board Health Care Facilities
Revenue EXTRAS - Kirby Pines Retirement
Community Project, 5.50%, Due 11/15/27 (Putable
at $100 and Rate Reset Effective 11/15/02) 2,450,000 2,453,063
TEXAS 0.1%
Trinity River Authority Refunding - Texas
Industries, Inc. Project, 6.375%, Due 9/01/07
(Putable at $100 and Rate Reset Effective 11/01/01) 440,000 454,850
Trinity River Authority Refunding - Texas
Industries, Inc. Project, Series A, 6.375%,
Due 9/01/07 (Putable at $100 and Rate Reset
Effective 11/01/01) 260,000 268,775
------------
723,625
- -------------------------------------------------------------------------------
TOTAL VARIABLE RATE PUT BONDS (COST $68,926,427) 967,293
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (A) 58.1%
MUNICIPAL BONDS 19.5%
CALIFORNIA 0.4%
Los Angeles, California Department of Water and
Power Water Works Revenue Refunding, 7.00%,
Due 2/15/22 (Crossover Refunding at $102 on
2/15/99) 3,550,000 3,724,128
17
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
COLORADO 1.8%
Boulder County, Colorado Revenue - National
Center For Atmospheric Research Project, 8.25%,
Due 12/01/13 (Crossover Refunding at $101
on 12/01/98) $17,580,000 $ 18,282,848
FLORIDA 0.8%
Bayside, Florida Community Improvement
Development District BAN, 5.75%, Due 6/01/98 7,870,000 7,906,359
ILLINOIS 4.4%
Alton, Illinois Hospital Facilities Revenue and
Refunding - St. Anthony's Health Center Project,
4.65%, Due 9/01/98 1,350,000 1,352,255
Illinois Health Facilities Authority Revenue
Refunding - Westlake Community Hospital
Project, 7.625%, Due 1/01/99 790,000 810,864
Lake, Cook, Kane and McHenry Counties, Illinois
Community United School District Number 220
TAN, 4.35%, Due 12/15/98 8,175,000 8,212,605
Winnebago and Boone Counties, Illinois Rockford
School District Number 205 Educational Purpose
Tax Anticipation Warrants, 5.10%, Due 10/30/98 34,120,000 34,275,928
------------
44,651,652
INDIANA 0.3%
Jefferson County, Indiana Hospital Authority
Hospital Revenue Refunding - King's Daughters'
Hospital Project, 8.50%, Due 8/15/13
(Pre-Refunding at $102 on 8/15/98) 3,000,000 3,122,430
KENTUCKY 0.1%
Kentucky EDFA Hospital System Refunding and
Improvement Revenue - Appalachian Regional
Healthcare, Inc. Project, 4.25%, Due 10/01/98 1,455,000 1,457,983
MICHIGAN 0.1%
Pontiac, Michigan Hospital Financing Authority
Hospital Revenue - NOMC Obligation Group
Project, 5.40%, Due 8/01/98 840,000 843,192
MISSOURI 2.9%
Branson, Missouri BAN - Water Treatment Plant
Project, 5.30%, Due 5/30/98 13,145,000 13,195,345
Cass County, Missouri Tax and Revenue
Anticipation Warrants, 4.625%, Due 6/01/98 2,000,000 2,002,320
St. Charles County, Missouri Francis Howell School
District TRAN, 4.97%, Due 6/30/98 14,000,000 14,038,220
------------
29,235,885
NEW JERSEY 3.4%
East Orange, New Jersey TAN:
4.95%, Due 10/23/98 10,000,000 10,026,800
4.98%, Due 5/29/98 6,500,000 6,514,560
Irvington Township, New Jersey BAN, 5.125%,
Due 6/09/98 8,369,000 8,400,551
Irvington Township, New Jersey TAN, 5.00%,
Due 10/23/98 7,500,000 7,545,675
New Jersey Health Care Facilities Financing
Authority Revenue - Kimball Medical Center
Issue, 8.00%, Due 7/01/98 1,620,000 1,642,729
------------
34,130,315
OHIO 0.1%
Cleveland, Ohio City School District Energy
Conservation Improvement GO:
6.53%, Due 3/15/98 570,000 570,433
6.53%, Due 9/15/98 590,000 598,803
------------
1,169,236
OREGON 0.2%
Washington County, Oregon Housing Authority
Tax Credit - Bethany Meadows Project, 5.00%,
Due 9/30/98 2,260,000 2,271,436
PENNSYLVANIA 1.2%
Delaware County, Pennsylvania IDA Refunding
Revenue - Resource Recovery Facility, 5.50%,
Due 1/01/99 2,940,000 2,974,045
Lancaster County, Pennsylvania Solid Waste
Management Authority Resource Recovery
System Revenue, 8.50%, Due 12/15/10
(Pre-Refunding at $102 on 6/15/98) 7,460,000 7,703,867
Pennsylvania Housing Finance Agency SFMR:
4.70%, Due 4/01/98 670,000 670,710
4.70%, Due 10/01/98 1,000,000 1,006,900
------------
2,355,522
RHODE ISLAND 0.4%
Johnston, Rhode Island BAN, 5.20%, Due 11/12/98 4,066,000 4,096,414
WISCONSIN 3.4%
Barron, Wisconsin Area School District BAN,
4.32%, Due 6/30/98 9,800,000 9,807,644
Bonduel, Wisconsin School District TRAN, 4.25%,
Due 8/24/98 2,000,000 2,004,560
Lac Courte Oreilles, Wisconsin Band of Lake
Superior Chippewa Indians Public Purpose
Infrastructure Revenue, 6.25%, Due 8/01/01
(Pre-Refunding at $100 on 8/01/98) 3,080,000 3,111,570
Manawa, Wisconsin School District TRAN, 4.33%,
Due 9/09/98 2,200,000 2,204,224
Menominee Indian School District BAN, 4.32%,
Due 6/30/98 7,300,000 7,305,767
Merrill, Wisconsin Area Common Public School
District TRAN, 4.27%, Due 9/30/98 2,300,000 2,304,393
Neillsville, Wisconsin School District TRAN,
4.40%, Due 8/21/98 1,250,000 1,253,063
Pulaski, Wisconsin Community School District
TRAN, 4.28%, Due 10/01/98 2,000,000 2,005,340
Walworth, Wisconsin Joint School District Number
1 BAN, 4.32%, Due 6/01/98 4,200,000 4,206,216
------------
34,202,777
------------
Total Municipal Bonds 197,450,177
VARIABLE RATE PUT BONDS 3.4%
INDIANA 1.0%
Indianapolis, Indiana MFHR - Kingsmill Venture
LP Project, 5.245%, Due 7/01/29 (Putable at $100
and Rate Reset Effective 3/03/98) 10,000,000 10,000,000
MINNESOTA 0.7%
St. Paul, Minnesota Port Authority CDR
Refunding - Battle Creek Hotel Project, 4.95%,
Due 7/01/12 (Putable at $100 and Rate Reset
Effective 4/01/98) 7,420,000 7,425,713
SOUTH DAKOTA 0.8%
Sioux Falls, South Dakota EDR Refunding - City
Centre Hotel Corporation Project, 7.00%,
Due 11/01/16 (Putable at $100 and Rate Reset
Effective on 1/01/99) 8,176,783 8,176,783
18
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
TEXAS 0.5%
Bell County, Texas Health Facilities Development
Corporation Revenue Refunding- Central Texas
Pooled Health Care Loan Program, 4.75%,
Due 10/01/23 (Putable at $100 and Rate Reset
Effective 10/01/98) $ 5,260,000 $ 5,273,098
WISCONSIN 0.4%
Germantown, Wisconsin IDR - Moldmakers Leasing
and Investments LLP Project, 5.00%, Due 12/01/12
(Putable at $100 and Rate Reset Effective 12/01/98) 4,000,000 4,006,040
-----------
Total Variable Rate Put Bonds 34,881,634
MUNICIPAL COMMERCIAL PAPER 0.4%
TEXAS
Port Development Corporation Texas Marine
Terminal Refunding Revenue - Mitsui and
Company (USA), Inc. Project, 4.50%, Due 3/04/98 4,400,000 4,400,000
ANNUAL PUT BONDS 0.5%
OHIO 0.1%
Sharonville, Ohio IDR - Ralston Purina
Company Project (e) 1,000,000 1,005,970
PENNSYLVANIA 0.1%
Pennsylvania Housing Finance Agency SFMR (e) 1,080,000 1,090,379
TENNESSEE 0.3%
Knox County, Tennessee 7.50% IDB IDR - Spartan
Food Systems, Inc. Project 1,500,000 1,503,750
Maryville, Tennessee 7.50% IDB IDR - Spartan
Food Systems, Inc. Project 1,500,000 1,503,750
-----------
3,007,500
------------
Total Annual Put Bonds 5,103,849
QUARTERLY VARIABLE RATE PUT BONDS 2.1%
OKLAHOMA 1.0%
Oklahoma Industries Authority Hospital Revenue -
Deaconess Health Care Corporation Project 10,000,000 10,000,000
WASHINGTON 1.1%
Washington Housing Finance Commission SFMR Refunding:
Series S-A 1,825,000 1,825,000
Series S-B 4,275,000 4,275,000
Series S-1A 820,000 820,000
Series S-1B 365,000 365,000
Series S-2B 545,000 545,000
Series S-4A 305,000 305,000
Series S-7A 2,930,000 2,930,000
-----------
11,065,000
-----------
Total Quarterly Variable Rate Put Bonds 21,065,000
WEEKLY VARIABLE RATE PUT BONDS 28.9%
ALABAMA 1.4%
Birmingham, Alabama IDB IDR - Home Baking
Company, Inc. Project:
Series A 3,565,000 3,565,000
Series B 1,385,000 1,385,000
Huntsville, Alabama Educational Building
Authority Revenue - Faulkner University Project 1,115,000 1,115,000
Montgomery, Alabama Educational Building
Authority Facilities Revenue - Faulkner
University Project 7,370,000 7,370,000
Montgomery, Alabama Educational Building
Authority Facilities Revenue -
Faulkner University Project 1,075,000 1,075,000
-----------
14,510,000
CALIFORNIA 7.2%
California EDFA IDR - Advanced Aerodynamics
and Structures, Inc. Project 2,500,000 2,500,000
California Statewide Communities Development
Authority IDR - Nichirin-Flex USA, Inc. Project 1,900,000 1,900,000
Glendora, California Foothill Nursing Home 940,000 940,000
Glenn, California IDA IDR - Land O' Lakes, Inc.
Project 1,900,000 1,900,000
Los Angeles, California Community Redevelopment
Agency Housing Revenue - Ithaka
Partners III Project 1,780,000 1,780,000
Los Angeles, California MFHR - Channel Gateway
Apartments Project 54,100,000 54,100,000
Los Angeles County, California IDA IDR - Fruitland
Associates Project 3,100,000 3,100,000
Pasadena, California Community Development
Commission COP:
Kings Plaza Project 555,000 555,000
Lake/Washington Neighborhood Shopping
Center Project 2,510,000 2,510,000
Riverside, California MFHR - Spruce Grove Project 3,680,000 3,680,000
-----------
72,965,000
COLORADO 0.9%
Arapahoe County, Colorado IDR - Denver
JetCenter, Inc. Project 1,600,000 1,600,000
Colorado HFA EDR - NTA Leasing Company
Project 2,100,000 2,100,000
Fort Collins, Colorado MFHR - The Bull Run
Townhomes Project 3,950,000 3,950,000
Grand Junction, Colorado IDR - Sundstrand
Corporation Project 1,000,000 1,000,000
-----------
8,650,000
FLORIDA 0.9%
Broward County, Florida HFA MFHR:
Parkview Partnership, Ltd. Project 8,500,000 8,500,000
Sawgrass Pines Apartments Project 1,000,000 1,000,000
-----------
9,500,000
GEORGIA 0.7%
Athens-Clarke County, Georgia IDA Industrial
Revenue - Nakanishi Manufacturing Corporation
Project 2,000,000 2,000,000
Floyd County, Georgia Development Authority
PCR Refunding - Inland-Rome Project 4,735,000 4,735,000
-----------
6,735,000
ILLINOIS 3.5%
Illinois DFA IDA - Toyomenka (America), Inc.
Project 2,200,000 2,200,000
Illinois DFA IDR - Sumitomo Machinery
Corporation Project 2,000,000 2,000,000
Illinois DFA MFHR Refunding - Orleans-Illinois
Project 29,020,000 29,020,000
Salem, Illinois IDR - Americana Building Products
Project 2,565,000 2,565,000
-----------
35,785,000
INDIANA 0.9%
Madison, Indiana EDR - Arvin Sango, Inc. Project 9,600,000 9,600,000
19
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL ADVANTAGE FUND (CONTINUED)
===============================================================================
Shares or
Principal Value
Amount (Note 2)
- -------------------------------------------------------------------------------
KANSAS 1.5%
Hays, Kansas Manufacturing Facilities
Development Revenue - Yuasa Exide Battery
Corporation Project $ 9,500,000 $ 9,500,000
Kansas City, Kansas Private Activity Revenue
Refunding - Inland Container Corporation Project 5,200,000 5,200,000
--------------
14,700,000
MARYLAND 0.7%
Frederick, Maryland GO 6,900,000 6,900,000
MASSACHUSETTS 2.4%
Revere, Massachusetts Housing Authority MFHR
Refunding - Water's Edge Apartments Project 23,990,000 23,990,000
MINNESOTA 0.7%
Delano, Minnesota IDR - Solar Plastics, Inc. Project 2,015,000 2,015,000
Rochester, Minnesota IDR Refunding - Seneca
Foods Corporation Project 4,675,000 4,675,000
--------------
6,690,000
MISSOURI 1.2%
Jefferson County, Missouri IDA Industrial Revenue
Refunding - Festus Manor Nursing Home Project 1,575,000 1,575,000
Missouri Economic Development Export and
Infrastructure Board IDR:
Series A 2,560,000 2,560,000
Series D 3,130,000 3,130,000
Washington, Missouri IDA IDR - Clemco
Industries Project 5,000,000 5,000,000
--------------
12,265,000
NEVADA 0.0%
Nevada Department of Commerce IDR -
Master-Halco, Inc. Project 300,000 300,000
NEW YORK 1.0%
Ontario County, New York Industrial Development
Agency IDR Refunding - Seneca Foods
Corporation Project 5,185,000 5,185,000
Wayne County, New York IDA IDR - Seneca Foods
Corporation Project 5,060,000 5,060,000
--------------
10,245,000
NORTH CAROLINA 0.2%
New Hanover County, North Carolina Industrial
Facilities Revenue - Wilmington
Machinery, Inc. Project 940,000 940,000
Wake County, North Carolina Industrial Facilities
and PCFA Revenue IDR - Aeroglide Corporation
Project 1,500,000 1,500,000
--------------
2,440,000
OHIO 0.6%
Ohio Housing Finance Agency Refunding - 10
Wilmington Place Project 5,945,000 5,945,000
PENNSYLVANIA 0.6%
Allentown, Pennsylvania Redevelopment Authority
MFHR Refunding - Arcadia Associated Project 6,000,000 6,000,000
SOUTH CAROLINA 1.1%
Rock Hill, South Carolina Industrial Revenue -
Willamette Industries, Inc. Project 7,500,000 7,500,000
South Carolina Jobs EDA EDR - B.F. Shaw, Inc.
Project 4,000,000 4,000,000
--------------
11,500,000
TENNESSEE 0.9%
Anderson County, Tennessee IDB Revenue -
Becromal of America, Inc. Project 1,965,000 1,965,000
Dover, Tennessee IDB Revenue - Nashville Wire
Products Manufacturing Company Project 3,000,000 3,000,000
Hamilton County, Tennessee IDB Revenue -
Komatsu America Manufacturing
Corporation Project 3,750,000 3,750,000
--------------
8,715,000
TEXAS 1.1%
Angelina and Neches River Authority Refunding -
Temple-Inland Forest 7,350,000 7,350,000
San Antonio, Texas Airport Lease Revenue -
Hedrick Beechcraft, Inc. Project 4,100,000 4,100,000
--------------
11,450,000
VIRGINIA 0.2%
Buena Vista, Virginia IDA IDR Refunding -
Everbrite, Inc. Project 1,975,000 1,975,000
WASHINGTON 0.4%
Pilchuck, Washington Development Public
Corporation Industrial Revenue - Kohkoku
USA, Inc. Project 4,000,000 4,000,000
WISCONSIN 0.8%
Janesville, Wisconsin IDR Refunding - Seneca
Foods Corporation Project 7,710,000 7,710,000
--------------
Total Weekly Variable Rate Put Bonds 292,570,000
DAILY VARIABLE RATE PUT BONDS 1.7%
COLORADO 0.4%
Arapahoe County, Colorado MFHR Refunding -
Stratford Station Project 3,900,000 3,900,000
NEW YORK 0.8%
New York Tollway Authority General Revenue
Receipts 7,800,000 7,800,000
VIRGINIA 0.5%
Richmond, Virginia IDA Revenue - Cogentrix of
Richmond, Inc. Project 5,000,000 5,000,000
--------------
Total Daily Variable Rate Put Bonds 16,700,000
MUNICIPAL MONEY MARKET 1.6%
MULTIPLE STATES
Strong Municipal Money Market Fund (g) 16,100,000 16,100,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $587,580,792) 588,270,660
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITES (COST $1,010,767,113) 100.6% 1,018,380,705
Other Assets and Liabilities, Net (0.6%) (6,340,467)
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $1,012,040,238
==============================================================================
20
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG HERITAGE MONEY FUND
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT 4.8%
Deutsche Bank AG New York, 6.18% $23,000,000 6.20% 4/03/98 $22,999,615
Huntington National Bank, 6.25% 23,000,000 6.28 4/24/98 22,999,045
Societe Generale:
6.08% 14,000,000 6.11 3/27/98 13,999,725
6.34% 11,000,000 6.38 4/16/98 10,999,483
- ------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT 70,997,868
- ------------------------------------------------------------------------------
COMMERCIAL PAPER 87.2%
Abbey National North America
Corporation 19,200,000 5.56 4/27/98 19,033,941
Alpine Securitization Corporation
(Acquired 2/06/98;
Cost $12,673,144) (b) 13,000,000 5.42 7/23/98 12,720,117
American Greetings Corporation 2,090,000 5.48 4/07/98 2,078,547
American Honda Finance Corporation 7,000,000 5.48 4/13/98 6,955,247
9,200,000 5.55 6/10/98 9,058,167
Ameritech Capital Funding Corporation
(Acquired 1/08/98;
Cost $5,817,826) (b) 5,900,000 5.45 4/10/98 5,865,165
Anaheim, California Electric
System 10,000,000 5.89 3/02/98 10,000,000
Anthem Insurance Companies, Inc.
(Acquired 2/03/98;
Cost $2,238,142) (b) 2,250,000 5.58 3/09/98 2,247,559
Aon Corporation 2,803,000 5.53 3/24/98 2,793,527
2,000,000 5.53 4/02/98 1,990,476
3,000,000 5.54 3/05/98 2,998,615
8,525,000 5.55 4/13/98 8,469,801
5,500,000 5.75 3/09/98 5,493,851
Aristar, Inc. 3,430,000 5.53 3/06/98 3,427,892
3,675,000 5.56 3/05/98 3,673,297
Ascot Capital Corporation
(Acquired 1/07/98;
Cost $19,720,428) (b) 20,000,000 5.53 4/08/98 19,886,328
Atlas Copco AB (Acquired 2/20/98;
Cost $5,668,308) (b) 5,700,000 5.56 3/31/98 5,674,470
Avon Capital Corporation
(Acquired 2/05/98;
Cost $4,980,067) (b) 5,000,000 5.52 3/03/98 4,999,233
BTM Capital Corporation
(Acquired 2/03/98;
Cost $739,451) (b) 750,000 5.82 5/01/98 742,725
Barton Capital Corporation:
(Acquired 2/05/98;
Cost $7,170,936) (b) 7,300,000 5.44 6/03/98 7,197,411
(Acquired 2/27/98;
Cost $14,796,259) (b) 14,900,000 5.57 4/13/98 14,803,175
Bell Atlantic Financial
Services, Inc. 9,400,000 5.49 3/04/98 9,397,133
Bell Atlantic Network 9,940,000 5.56 3/20/98 9,912,367
Brazos River Authority,
Texas PCR 23,700,000 5.85 3/09/98 23,700,000
British Gas Capital, Inc. 6,750,000 5.38 8/20/98 6,577,504
Budget Funding Corporation 15,000,000 5.50 3/17/98 14,965,625
Calcasieu Parish, Inc.
Louisiana IDB Environmental
Revenue 17,375,000 5.54 6/12/98 17,375,000
Calcot, Ltd. 2,000,000 5.51 4/15/98 1,986,531
3,000,000 5.57 4/22/98 2,976,327
6,000,000 5.65 3/04/98 5,998,117
California PCFA Environmental
Improvement Revenue:
(Acquired 12/15/97;
Cost $6,000,000) (b) 6,000,000 5.83 3/11/98 6,000,000
(Acquired 12/19/97;
Cost $15,825,000) (b) 15,825,000 5.86 3/04/98 15,825,000
Centre Square Funding
Corporation (Acquired 2/17/97;
Cost $15,684,559) (b) 15,750,000 5.54 3/16/98 15,716,067
Certain Funding Corporation:
(Acquired 2/11/98;
Cost $5,928,578) (b) 6,010,000 5.48 5/11/98 5,945,960
(Acquired 2/05/98;
Cost $7,896,111) (b) 8,000,000 5.50 5/01/98 7,926,667
Cigna Corporation 12,000,000 5.46 5/06/98 11,881,700
10,000,000 5.47 5/05/98 9,902,756
Countrywide Funding Corporation 11,820,000 5.52 3/31/98 11,767,481
8,000,000 5.53 3/27/98 7,969,278
Creative Capital Corporation
(Acquired 2/03/98;
Cost $740,755) (b) 750,000 6.25 4/15/98 744,271
Credit Suisse First Boston, Inc.
(Acquired 2/18/98;
Cost $19,724,472) (b) 20,000,000 5.45 5/20/98 19,760,806
Duke Capital Corporation:
(Acquired 2/06/98;
Cost $6,242,250) (b) 6,300,000 5.50 4/07/98 6,265,350
(Acquired 2/20/98;
Cost $8,884,500) (b) 9,000,000 5.50 5/15/98 8,898,250
(Acquired 2/24/98;
Cost $1,975,861) (b) 2,000,000 5.50 5/14/98 1,977,694
(Acquired 2/05/98;
Cost $4,955,166) (b) 4,975,000 5.52 3/03/98 4,974,237
Edison Asset Securitization,
LLC (Acquired 1/07/98;
Cost $8,886,225) (b) 9,000,000 5.55 3/30/98 8,961,150
Enterprise Funding Corporation
(Acquired 1/27/98;
Cost $9,948,056) (b) 10,000,000 5.50 3/02/98 10,000,000
Eureka Securitization, Inc.
(Acquired 1/12/98;
Cost $7,738,597) (b) 7,800,000 5.45 3/05/98 7,796,458
Finova Capital Corporation 12,300,000 5.47 3/18/98 12,270,097
1,175,000 5.52 3/05/98 1,174,459
6,300,000 5.53 3/11/98 6,291,290
Ford Motor Credit Company 9,000,000 5.44 5/06/98 8,911,600
13,000,000 5.45 5/08/98 12,868,140
21
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG HERITAGE MONEY FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
Fountain Square Commercial
Corporation:
(Acquired 2/11/98;
Cost $4,863,750) (b) $ 5,000,000 5.45% 8/10/98 $ 4,878,132
(Acquired 1/26/98;
Cost $2,655,667) (b) 2,690,000 5.47 4/20/98 2,669,972
(Acquired 1/26/98;
Cost $2,344,326) (b) 2,375,000 5.47 4/21/98 2,356,957
(Acquired 2/12/98;
Cost $2,668,500) (b) 2,705,000 5.52 5/11/98 2,675,966
(Acquired 12/02/97;
Cost $4,946,475) (b) 5,019,000 5.78 3/02/98 5,019,000
Franklin Resources, Inc.:
(Acquired 2/03/98;
Cost $5,669,045) (b) 5,750,000 5.45 5/07/98 5,692,548
(Acquired 1/26/98;
Cost $3,952,680) (b) 4,000,000 5.46 4/14/98 3,973,913
(Acquired 12/16/98;
Cost $6,894,903) (b) 7,000,000 5.75 3/20/98 6,979,875
(Acquired 12/19/98;
Cost $2,885,541) (b) 2,930,000 5.75 3/24/98 2,919,704
Frigate Funding Corporation
(Acquired 2/11/98;
Cost $19,917,050) (b) 20,000,000 5.53 3/10/98 9,975,422
GTE Corporation 9,500,000 5.55 3/16/98 9,479,496
5,500,000 5.55 3/19/98 5,485,585
5,000,000 5.56 3/18/98 4,987,644
General Motors Acceptance
Corporation 5,000,000 5.43 8/04/98 4,883,104
Goldman Sachs Group LP 20,000,000 5.51 6/11/98 19,690,828
Greenwich Funding Corporation
(Acquired 2/12/98;
Cost $14,935,717) (b) 15,000,000 5.51 3/12/98 14,977,042
Gulf Coast Waste Disposal
Authority PCR 3,700,000 5.55 5/12/98 3,700,000
Halifax PLC 6,800,000 5.49 7/02/98 6,673,486
7,100,000 5.60 5/12/98 7,021,584
Harley-Davidson Funding Corporation:
(Acquired 2/02/98;
Cost $4,930,739) (b) 5,000,000 5.48 5/04/98 4,952,050
(Acquired 2/10/98;
Cost $1,972,450) (b) 2,000,000 5.51 5/11/98 1,978,572
(Acquired 1/29/98;
Cost $4,855,430) (b) 4,900,000 5.55 3/30/98 4,878,848
Harris County, Texas IDC Solid
Waste Disposal Revenue:
(Acquired 2/09/98;
Cost $8,500,000) (b) 8,500,000 5.57 5/12/98 8,500,000
(Acquired 2/10/98;
Cost $5,000,000) (b) 5,000,000 5.57 5/11/98 5,000,000
(Acquired 1/29/98;
Cost $5,100,000) (b) 5,100,000 5.59 4/01/98 5,100,000
(Acquired 11/19/97;
Cost $3,500,000) (b) 3,500,000 5.80 3/10/98 3,500,000
Heller Financial, Inc. 2,375,000 5.85 3/05/98 2,373,842
5,000,000 5.88 3/17/98 4,987,760
ING America Insurance
Holdings, Inc. 13,000,000 5.43 7/06/98 12,752,935
International Securitization
Corporation (Acquired 1/16/98;
Cost $14,858,692) (b) 15,000,000 5.47 3/19/98 14,961,254
JES Developments, Inc.:
(Acquired 2/09/98;
Cost $4,113,160) (b) 4,150,000 5.51 4/08/98 4,126,498
(Acquired 2/19/98 - 2/26/98;
Cost $17,857,658) (b) 18,000,000 5.51 4/14/98 17,881,535
Jefferson Smurfit Finance
Corporation 5,700,000 5.47 5/12/98 5,638,508
5,000,000 5.48 3/10/98 4,993,911
7,500,000 5.48 3/24/98 7,474,883
Johnson Controls, Inc.:
33,100 5.23 Upon Demand 33,100
(Acquired 1/12/98;
Cost $17,432,043) (b) 17,565,000 5.45 3/04/98 17,559,682
KZH-ING-1 Corporation:
(Acquired 2/13/98;
Cost $2,108,596) (b) 2,137,000 5.50 5/11/98 2,114,146
(Acquired 2/24/98;
Cost $3,353,167) (b) 3,397,000 5.53 5/19/98 3,356,298
(Acquired 2/24/98;
Cost $2,987,512) (b) 3,000,000 5.55 3/23/98 2,990,288
KZH Holding Corporation III:
(Acquired 2/10/98;
Cost $4,530,882) (b) 4,653,000 5.43 8/03/98 4,544,919
(Acquired 1/05/98;
Cost $12,956,392) (b) 13,130,000 5.60 3/31/98 13,070,769
KZH-Soleil Corporation
(Acquired 1/15/98;
Cost $6,016,125) (b) 6,100,000 5.50 4/15/98 6,058,994
KZH-Soleil-2 Corporation
(Acquired 2/24/98;
Cost $6,052,979) (b) 6,100,000 5.55 4/15/98 6,058,622
Lexington Parker Capital
Corporation:
(Acquired 2/03/98;
Cost $12,750,516) (b) 13,000,000 5.44 6/10/98 12,803,556
(Acquired 1/26/98;
Cost $1,332,015) (b) 1,350,000 5.45 4/24/98 1,339,168
(Acquired 2/10/98;
Cost $3,345,059) (b) 3,360,000 5.52 3/11/98 3,355,363
(Acquired 2/26/98;
Cost $1,773,033) (b) 1,775,000 5.70 3/05/98 1,774,157
LOCAP, Inc. (Acquired 2/26/98;
Cost $4,713,963) (b) 4,740,000 5.65 4/02/98 4,716,939
Market Street Funding
Corporation:
(Acquired 1/06/98;
Cost $4,746,624) (b) 4,800,000 5.56 3/19/98 4,787,397
(Acquired 1/14/98;
Cost $14,872,133) (b) 15,000,000 5.48 3/12/98 14,977,167
Martin Marietta Materials, Inc.
(Acquired 2/13/98;
Cost $6,958,216) (b) 7,000,000 5.51 3/24/98 6,976,429
Merrill Lynch & Company, Inc. 3,675,000 5.37 8/14/98 3,584,549
2,675,000 5.50 3/20/98 2,667,644
Minolta Corporation 6,716,000 5.60 3/12/98 6,705,553
22
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG HERITAGE MONEY FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
Monsanto Company:
(Acquired 2/02/98;
Cost $6,855,884) (b) $ 7,000,000 5.41% 6/19/98 $ 6,885,338
(Acquired 2/25/98;
Cost $5,107,931) (b) 5,225,000 5.45 7/23/98 5,111,886
Morgan Stanley, Dean Witter,
Discover & Company 22,160,000 5.48 3/03/98 22,156,626
National Australia Funding, Inc. 11,960,000 5.66 6/01/98 11,788,886
National Fuel Gas Company 5,000,000 5.50 4/27/98 4,957,222
10,000,000 5.51 4/06/98 9,946,431
Newell Company:
(Acquired 2/13/98;
Cost $9,952,639) (b) 10,000,000 5.50 3/16/98 9,978,611
(Acquired 2/18/98;
Cost $2,386,433) (b) 2,400,000 5.50 3/27/98 2,390,833
(Acquired 2/03/98;
Cost $4,728,110) (b) 4,750,000 5.53 3/05/98 4,747,811
Nordbanken North America, Inc. 13,750,000 5.37 8/25/98 13,389,017
8,500,000 5.40 8/27/98 8,273,050
Oakland-Alameda County,
California Coliseum Authority 5,000,000 5.57 4/03/98 5,000,000
15,000,000 5.57 4/06/98 15,000,000
Oklahoma IFA 4,720,000 5.60 5/01/98 4,720,000
Old Line Funding Corporation:
(Acquired 1/09/98;
Cost $11,838,667) (b) 12,000,000 5.50 4/07/98 11,934,000
(Acquired 2/25/98;
Cost $8,929,237) (b) 9,000,000 5.55 4/17/98 8,936,175
PHH Corporation 7,100,000 5.71 3/27/98 7,071,847
Parker-Hannifin Corporation
(Acquired 2/25/98;
Cost $4,394,544) (b) 4,400,000 5.58 3/05/98 4,397,954
Peacock Funding Corporation:
(Acquired 1/15/98;
Cost $1,982,678) (b) 2,000,000 5.47 3/13/98 1,996,657
(Acquired 2/04/98;
Cost $3,940,975) (b) 3,995,000 5.47 5/04/98 3,956,758
(Acquired 11/10/97;
Cost $4,932,167) (b) 5,050,000 5.60 4/09/98 5,020,149
Reliastar Mortgage Corporation 2,000,000 5.48 3/06/98 1,998,782
10,000,000 5.49 3/17/98 9,977,125
5,100,000 5.49 3/18/98 5,087,556
5,100,000 5.56 4/02/98 5,075,582
Repeat Offering Securitization
Entity, Inc.:
(Acquired 1/16/98;
Cost $5,819,613) (b) 5,900,000 5.45 4/16/98 5,859,806
(Acquired 2/10/98;
Cost $11,859,347) (b) 12,000,000 5.48 4/28/98 11,895,880
(Acquired 2/23/98;
Cost $386,163) (b) 387,000 5.56 3/10/98 386,522
SAFECO Credit Corporation 5,900,000 5.50 3/26/98 5,878,367
SAFECO Corporation:
(Acquired 2/20/98;
Cost $7,926,667) (b) 8,000,000 5.50 4/21/98 7,938,889
(Acquired 2/24/98;
Cost $6,035,696) (b) 6,100,000 5.50 5/04/98 6,041,288
Salomon Smith
Barney Holdings, Inc. 11,325,000 5.47 5/05/98 11,214,871
Sanwa Business
Credit Corporation 750,000 6.05 4/06/98 745,589
Sigma Finance, Inc.
(Acquired 1/08/98;
Cost $10,695,254) (b) 11,000,000 5.45 7/10/98 10,783,514
Society of New York
Hospital Fund, Inc. 5,000,000 5.79 3/04/98 4,998,392
3,175,000 5.50 4/27/98 3,147,836
Sony Capital Corporation
(Acquired 2/17/98;
Cost $19,953,583) (b) 20,000,000 5.57 3/04/98 19,993,811
Sotheby's, Inc. 6,770,000 5.62 4/03/98 6,736,180
2,500,000 5.55 3/20/98 2,493,063
Southern Electric Generating
Company (Acquired 2/03/98 -
2/24/98; Cost $7,129,639) (b) 7,150,000 5.61 3/02/98 7,150,000
Spintab-Swedmortgage AB 8,000,000 5.45 6/09/98 7,880,100
14,000,000 5.60 4/06/98 13,923,778
Sunshine State Series 6,266,000 5.54 5/12/98 6,197,537
Svenska Handelsbanken, Inc. 20,650,000 5.43 4/21/98 20,494,265
System Capital Finance
Corporation 7,000,000 5.50 3/06/98 6,995,722
2,529,000 5.52 3/18/98 2,522,796
2,430,000 5.53 3/24/98 2,421,788
TRW, Inc.:
(Acquired 2/20/98 - 2/26/98;
Cost $11,571,214) (b) 11,675,000 5.49 4/24/98 11,580,536
Torchmark Corporation 2,000,000 5.55 3/02/98 2,000,000
5,000,000 5.55 3/09/98 4,994,604
4,000,000 5.77 3/10/98 3,994,871
Transamerica Finance
Corporation 2,870,000 5.48 3/06/98 2,868,252
12,600,000 5.49 3/16/98 12,573,099
Tribune Company:
(Acquired 2/06/98;
Cost $2,979,488) (b) 3,000,000 5.47 3/26/98 2,989,060
(Acquired 2/23/98;
Cost $1,517,656) (b) 1,530,000 5.48 4/17/98 1,519,287
(Acquired 2/04/98;
Cost $9,440,493) (b) 9,500,000 5.50 3/17/98 9,478,229
23
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG HERITAGE MONEY FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
Variable Funding Capital
Corporation:
(Acquired 1/22/98;
Cost $6,487,060) (b) $ 6,577,000 5.47% 4/22/98 $ 6,526,034
(Acquired 2/12/98;
Cost $5,512,127) (b) 5,535,000 5.51 3/11/98 5,527,376
(Acquired 12/09/98;
Cost $8,966,242) (b) 9,092,000 5.79 3/05/98 9,087,613
West Baton Rouge Parish, Louisiana:
(Acquired 12/12/97;
Cost $5,000,000) (b) 5,000,000 5.84 3/13/98 5,000,000
(Acquired 12/18/97;
Cost $10,000,000) (b) 10,000,000 5.85 3/12/98 10,000,000
Whiting, Indiana Industrial
Sewage and Solid Waste
Disposal Revenue 10,000,000 5.84 3/13/98 10,000,000
Wisconsin Electric Power Company 100 5.21 Upon Demand 100
Wood Street Funding Corporation:
(Acquired 2/12/98;
Cost $8,921,625) (b) 9,000,000 5.50 4/10/98 8,946,375
(Acquired 2/04/98 -
2/27/98; Cost $7,889,097) (b) 7,950,000 5.56 4/09/98 7,903,323
Yorkshire Building Society 13,245,000 5.52 3/16/98 13,216,567
- ------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER 1,293,146,069
- ------------------------------------------------------------------------------
CORPORATE OBLIGATIONS 3.0%
American Honda Finance
Corporation Floating Rate
Medium Term Notes (Acquired
7/22/97; Cost $6,000,000) (b) 6,000,000 5.62 7/27/98 6,000,000
Bank Of America National
Association Phoenix, Arizona
Short Term Bank Notes,
Tranche #7, 5.95% 4,000,000 6.00 10/22/98 3,998,775
Beta Finance, Inc. (Acquired
10/21/97; Cost $20,000,000)(b) 20,000,000 6.00 10/27/98 20,000,000
General Motors Acceptance Corporation:
Tranche #148, 6.125% 10,000,000 6.32 4/23/98 9,997,189
Tranche #162, 6.15% 5,000,000 6.35 5/22/98 4,997,735
- ------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS 44,993,699
- ------------------------------------------------------------------------------
TAXABLE VARIABLE RATE PUT BONDS 5.0%
Aurora, Kane & DuPage Counties,
Illinois IDR 3,000,000 5.75 3/05/98 3,000,000
Bel Air, LLC 4,425,000 5.75 3/05/98 4,425,000
Botsford General Hospital Revenue 2,500,000 5.70 3/02/98 2,500,000
Galliano Marine Services, Inc. 5,460,000 5.75 3/05/98 5,460,000
KinderCare Learning Centers, Inc. 4,500,000 5.70 3/04/98 4,500,000
Maine Regional Waste System, Inc.
Solid Waste Resource Recovery
Revenue 2,200,000 5.75 3/04/98 2,200,000
Med-Map, LLC 4,900,000 5.69 3/04/98 4,900,000
Montgomery County, Pennsylvania
IDA Revenue 530,000 5.75 3/04/98 530,000
New Jersey EDA EDR - MSNBC/CNBC 9,700,000 5.60 3/02/98 9,700,000
New Jersey Sports & Exposition
Authority Sports Complex
Subordinated Refunding Revenue 2,000,000 5.70 3/02/98 2,000,000
NuFunding, Inc. Health Care
Revenue 4,965,000 5.70 3/04/98 4,965,000
Passaic County, New Jersey GO
Refunding 13,600,000 5.65 3/04/98 13,600,000
Thayer Properties, LLC 3,130,000 5.75 3/05/98 3,130,000
Tifton Mall, Inc. 3,020,000 5.75 3/05/98 3,020,000
WLB, LLC 10,000,000 5.75 3/05/98 10,000,000
- ------------------------------------------------------------------------------
TOTAL TAXABLE VARIABLE RATE PUT BONDS 73,930,000
- ------------------------------------------------------------------------------
UNITED STATES GOVERNMENT AND AGENCY ISSUES 1.6%
Federal Home Loan Bank Bonds (f) 12,250,000 5.70 6/17/98 12,250,000
Federal Home Loan Bank Bonds 11,375,000 5.71 6/04/98 11,375,000
- ------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT AND AGENCY ISSUES 23,625,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES, 101.6% 1,506,692,636
Other Assets and Liabilities, Net (1.6%) (23,153,024)
- ------------------------------------------------------------------------------
NET ASSETS 100.00% $1,483,539,61
==============================================================================
24
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
MUNICIPAL BONDS 20.4%
CALIFORNIA 0.2%
Montebello, California 4.05%
TRAN $ 4,500,000 4.00% 6/30/98 $ 4,500,697
ILLINOIS 6.2%
Lakemoor, Illinois MFMR Mortgage -
Lakemoor Apartments Project:
Series B (e) 50,000,000 4.75 3/16/98 50,000,000
Series C (e) 10,000,000 4.70 3/16/98 10,000,000
Oakbrook Terrace, Illinois MFHR:
Renaissance II Project (e) 15,000,000 4.95 11/03/98 15,000,000
Renaissance III Project (e) 41,820,000 4.95 11/03/98 41,820,000
------------
116,820,000
INDIANA 0.5%
Lawrence, Indiana EDR -
Charleston Bay Project (e) 10,000,000 4.75 4/01/98 10,000,000
KANSAS 0.5%
Johnson County, Kansas Unified School
District Number 232 4.10% GO 10,000,000 4.10 6/01/98 10,000,000
KENTUCKY 4.3%
Kentucky Association of Counties
Advance Revenue/Cash Flow
Borrowing 4.30% TRAN 79,886,040 4.16 6/30/98 79,923,700
LOUISIANA 0.6%
Louisiana Public Facilities
Authority MFHR - Southfork Village
Apartments Project (e) 10,500,000 4.92 3/23/98 10,518,471
NEW JERSEY 2.7%
Bayonne, New Jersey:
5.00% BAN 6,249,200 4.41 5/11/98 6,256,214
5.00% BAN 9,185,000 4.41 9/11/98 9,212,878
East Orange, New Jersey 4.90%
BAN 11,000,000 4.12 8/28/98 11,041,458
Jersey City, New Jersey:
4.25% GO 6,390,000 4.01 9/18/98 6,398,314
4.50% GO 8,100,000 4.21 7/02/98 8,107,770
North Bergen Township, Hudson
County, New Jersey 4.25%
Refunding 9,250,000 4.20 4/24/98 9,250,603
------------
50,267,237
NEW MEXICO 1.2%
Bernalillo County, New Mexico MFHR -
Westwood Villas Project (e) 13,360,000 4.65 3/02/98 13,360,000
New Mexico MFMR - The Bluffs at Tierra
Contenta Apartments Project (e) 8,780,000 4.30 9/01/98 8,780,000
------------
22,140,000
NEW YORK 2.8%
Oneida County, New York 4.50%
GO BAN 11,752,000 4.09 5/01/98 11,759,835
Onondaga County, New York Industrial
Development Agency Solid Waste
Disposal Facilities Revenue -
Solvay Paperboard II Project(e)40,000,000 4.10 11/01/98 40,000,000
------------
51,759,835
WISCONSIN 0.2%
Menomonie, Wisconsin Area School
District 4.25% TRAN 4,500,000 4.05 9/04/98 4,504,403
MULTIPLE STATES 1.2%
Puttable Floating Option Tax-Exempt
Receipts, Series PPT-6 (e) 21,720,000 4.08 8/06/98 21,720,000
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 382,154,343
- ------------------------------------------------------------------------------
MUNICIPAL COMMERCIAL PAPER 0.3%
NORTH CAROLINA
Wake County, North Carolina Industrial
Facilities and PCFA Revenue -
California Power and Light Company
Project 6,100,000 4.20 3/31/98 6,100,000
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL COMMERCIAL PAPER 6,100,000
- ------------------------------------------------------------------------------
25
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
ANNUAL VARIABLE RATE PUT BONDS 7.0%
CALIFORNIA 1.4%
California Higher Education Loan
Authority, Inc. Student Loan
Revenue $14,450,000 4.15% 7/01/98 $ 14,440,446
Orange County, California Apartment
Development Revenue:
Villa La Paz Project 3,500,000 4.35 8/15/98 3,500,000
Villas Aliento Project 8,590,000 4.35 8/15/98 8,590,000
------------
26,530,446
COLORADO 0.3%
Dove Valley, Colorado Metropolitan
District GO Refunding 4,800,000 4.25 11/01/98 4,800,000
DISTRICT OF COLUMBIA 0.5%
District of Columbia Housing
Finance Agency SFMR 10,000,000 4.15 7/01/98 10,000,000
FLORIDA 2.3%
Florida Housing Finance Agency MFHR:
Buena Vista Project 21,170,000 4.01 11/01/98 21,170,000
Iona Lakes Project 17,155,000 4.10 4/01/98 17,155,000
Wood Forest II Project 4,300,000 4.10 12/01/98 4,300,000
------------
42,625,000
LOUISIANA 1.4%
Louisiana Municipal Securities Trust
Class A Certificates:
Series 1997-9 8,995,000 4.15 5/20/98 8,995,000
Series 1997-10A 11,505,000 4.10 6/02/98 11,505,000
Series 1997-10B 5,730,000 4.10 6/02/98 5,730,000
------------
26,230,000
TENNESSEE 0.4%
Brownsville, Tennessee IDB IDR -
Dynametal Technologies, Inc.
Project 7,000,000 4.20 6/01/98 7,000,000
TEXAS 0.5%
Greater Texas Student Loan
Corporation Revenue Refunding 4,250,000 4.05 6/01/98 4,250,000
Tarrant County, Texas HFC MFHR -
Lincoln Meadows Project 4,375,000 4.10 12/01/98 4,375,000
------------
8,625,000
MULTIPLE STATES 0.2%
Eastern States Tax-Exempt Mortgage
Bond Trust 4,715,000 5.19 3/01/99 4,715,000
- ------------------------------------------------------------------------------
TOTAL ANNUAL VARIABLE RATE PUT BONDS 130,525,446
- ------------------------------------------------------------------------------
SEMI-ANNUAL VARIABLE RATE PUT BONDS 0.3%
NEVADA 0.2%
Nevada Housing Division Single Family
Program - Federally Insured or
Guaranteed Mortgage Loans 3,145,000 4.15 4/02/98 3,145,000
OKLAHOMA 0.1%
Creek County, Oklahoma Industrial
Authority IDR Refunding - Indiana
Glass Company Project 2,005,000 4.35 6/01/98 2,005,000
- ------------------------------------------------------------------------------
TOTAL SEMI-ANNUAL VARIABLE RATE PUT BONDS 5,150,000
- ------------------------------------------------------------------------------
QUARTERLY VARIABLE RATE PUT BONDS 2.8%
LOUISIANA 0.6%
Louisiana Housing Finance Agency GNMA
Collateralized SFMR MERLOT 11,360,000 4.20 5/01/98 11,360,000
MINNESOTA 1.8%
Dakota County, Washington County, and
Anoka, Minnesota Housing and Redevelopment
Authorities SFMR - GNMA Mortgage-Backed
Securities Program MERLOT 15,680,000 4.05 6/01/98 15,680,000
Eagan, Minnesota Revenue - Allina Health
System and Allina Medical
Group Project 4,750,000 4.18 4/01/98 4,750,000
Forest Lake, Minnesota Revenue -
Allina Health System and Allina
Medical Group Project 3,300,000 4.18 4/01/98 3,300,000
Minneapolis, Minnesota Revenue -
Minneapolis Institute of the
Arts Project 6,100,000 4.18 4/01/98 6,100,000
Woodbury, Minnesota Revenue - Allina
Health System and Allina Medical
Group Project 3,900,000 4.18 4/01/98 3,900,000
------------
33,730,000
OKLAHOMA 0.3%
Oklahoma County, Oklahoma Industrial
Authority Revenue Refunding - Baptist
General Convention of the State of
Oklahoma Retirement Center
Project 5,135,000 4.20 6/01/98 5,135,000
26
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
WISCONSIN 0.1%
Wisconsin HDA EDA Home Ownership
Revenue - MERLOT $ 2,220,000 4.05% 6/01/98 $ 2,220,000
- ------------------------------------------------------------------------------
TOTAL QUARTERLY VARIABLE RATE PUT BONDS 52,445,000
- ------------------------------------------------------------------------------
MONTHLY VARIABLE RATE PUT BONDS 1.3%
COLORADO 0.1%
Jefferson County, Colorado IDR -
Anthony A. Petrarca/Cedarwood
Construction Company, Inc.
Project 2,420,000 4.45 4/01/98 2,420,000
ILLINOIS 0.1%
Green Leaf Ventures, Inc. Tax
Exempt Bond Grantor Trust 2,000,000 4.70 4/01/98 2,000,000
MARYLAND 0.4%
Prince George's County, Maryland
EDR Refunding - Capital View II
LP Facility 6,380,000 4.40 4/01/98 6,380,000
MICHIGAN 0.1%
Michigan Job Development Authority
IDR - Anthony A. Petrarca/Cedarwood
Construction Company, Inc.
Project 1,740,000 4.45 4/01/98 1,740,000
OHIO 0.2%
Blue Bell Tax-Exempt Bond Grantor
Trust 1,794,959 4.40 4/01/98 1,794,959
Summit County, Ohio Insured IDR -
Anthony A. Petrarca/Cedarwood
Construction Company, Inc.
Project 2,625,000 4.45 4/01/98 2,625,000
-----------
4,419,959
MULTIPLE STATES 0.4%
Carolina Freight Tax Exempt Bond
Grantor Trust 653,328 4.55 4/01/98 653,328
GAF Corporation Tax Exempt Bond
Grantor Trust 4,300,000 4.30 4/01/98 4,300,000
Johnson Controls, Inc. Tax Exempt
Bond Grantor Trust 2,345,000 4.45 4/01/98 2,345,000
7,298,328
- ------------------------------------------------------------------------------
TOTAL MONTHLY VARIABLE RATE PUT BONDS 24,258,287
- ------------------------------------------------------------------------------
WEEKLY VARIABLE RATE PUT BONDS 61.7%
ALABAMA 2.8%
Alabama IDA IDR:
Research Genetics, Inc. Project 3,120,000 3.75 3/09/98 3,120,000
Scientific Utilization, Inc.
Project 3,500,000 3.70 3/09/98 3,500,000
Whitesell Project 5,000,000 3.75 3/09/98 5,000,000
Birmingham, Alabama Baptist Medical
Center - Special Care Facilities
Financing Authority Revenue:
Baptists Health System, Inc.
Project 4,430,000 3.90 3/09/98 4,430,000
Methodist Home for the Aging
Project 11,670,000 3.80 3/09/98 11,670,000
Birmingham, Alabama Medical Clinic
Board - Baptist Medical Centers
Medical Clinic Revenue - Western
Medical Systems, Inc. Project 6,110,000 3.90 3/09/98 6,110,000
Bridgeport, Alabama IDB IDR -
Beaulieu Nylon, Inc. Project 10,000,000 3.90 3/09/98 10,000,000
Grove Hill, Alabama IDB IDR -
Hamilton Woods Veneer Project 2,900,000 3.70 3/09/98 2,900,000
Madison County, Alabama MFHR Refunding:
Autumn Wood Project 2,920,000 3.75 3/09/98 2,920,000
Pinehurst Project 1,225,000 3.75 3/09/98 1,225,000
Montgomery, Alabama IDB IDR - Asphalt
Contractors, Inc. Project 1,300,000 3.75 3/09/98 1,300,000
-----------
52,175,000
ARIZONA 0.7%
Chandler, Arizona IDA MFHR - Greentree
Place Apartments Project 6,524,000 5.77 3/09/98 6,524,000
Phoenix, Arizona IDA Airport Facility
Revenue - America West Airlines,
Inc. Project 5,000,000 4.00 3/09/98 5,000,000
Tempe, Arizona IDA IDR - Schreiber
Foods, Inc. Project 1,900,000 3.85 3/09/98 1,900,000
-----------
13,424,000
ARKANSAS 0.7%
Conway County, Arkansas IDR - Cadron
Creek Fibre Corporation Project 8,300,000 3.75 3/09/98 8,300,000
Searcy, Arkansas IDR - Yarnell Ice
Cream Company, Inc. Project 2,600,000 4.00 3/09/98 2,600,000
Trumann, Arkansas IDR - Roach
Manufacturing Corporation
Project 2,000,000 4.00 3/09/98 2,000,000
-----------
12,900,000
27
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
CALIFORNIA 6.1%
California PCFA PCR Resource Recovery
- Wadham Energy Project:
Series B $ 8,195,000 3.85% 3/09/98 $ 8,195,000
Series C 5,200,000 3.85 3/09/98 5,200,000
Contra Costa County, California
MFHR - The Park Regency Project 7,400,000 4.10 3/09/98 7,400,000
Los Angeles County, California IDA
IDR - Goldberg & Solovy Foods,
Inc. Project 2,900,000 5.10 3/09/98 2,900,000
Macon Trust Pooled Certificates 45,040,000 3.71 3/09/98 45,040,000
Ontario, California IDA IDR -
P & S Development Project 2,500,000 4.00 3/09/98 2,500,000
Orange County, California Apartment
Development Revenue - WLCO LF
Partners Project:
Series 1 5,000,000 4.30 3/09/98 5,000,000
Series 3 9,700,000 4.30 3/09/98 9,700,000
Paramount, California Housing Authority
MFHR Refunding - Century Place
Apartments Project 8,500,000 3.99 3/09/98 8,500,000
San Bernardino County, California COP -
1992 Justice Center/Airport Improvements
Refunding Project 1,960,000 4.10 3/09/98 1,960,000
San Marcos, California Redevelopment
Agency MFHR - San Marcos Retirement
Village Project 6,800,000 4.41 3/09/98 6,800,000
Yolo County, California MFHR -
Primero Grove Student Apartments
Project 11,715,000 4.00 3/09/98 11,715,000
------------
114,910,000
COLORADO 0.8%
Adams County, Colorado IDR - Yellow
Freight Systems, Inc. 2,500,000 3.80 3/09/98 2,500,000
Aurora, Colorado IDR - Optima
Batteries, Inc. Project 3,430,000 3.70 3/09/98 3,430,000
Colorado Health Facilities Authority
Refunding Revenue - Valley View
Hospital Association Project 2,580,000 4.25 3/09/98 2,580,000
Jefferson County, Colorado IDR -
Accutronics, Inc. Project 2,575,000 3.95 3/09/98 2,575,000
Westminster, Colorado IDR - Lifecare
International Project 4,600,000 3.80 3/09/98 4,600,000
------------
15,685,000
DELAWARE 0.2%
Delaware EDA Industrial Revenue Orient
Chemical Corporation Project 3,020,000 4.10 3/09/98 3,020,000
DISTRICT OF COLUMBIA 1.2%
District of Columbia HFA MFHR -
Pooled Letter of Credit
Projects 3,390,000 3.90 3/09/98 3,390,000
District of Columbia Housing Finance
Agency SFMR 8,300,000 3.71 3/09/98 8,300,000
District of Columbia Revenue - George
Washington University Project 11,100,000 4.20 3/09/98 11,100,000
------------
22,790,000
FLORIDA 1.7%
Bay County, Florida Revenue -
Methodist Homes Project 3,885,000 3.80 3/09/98 3,885,000
Brevard County, Florida IDR - U. S.
Space Camp Foundation Project 3,540,000 3.90 3/09/98 3,540,000
Broward County, Florida HFA MFHR -
Sawgrass Pines Apartments
Project 11,000,000 4.35 3/09/98 11,000,000
Dade County, Florida IDA IDR -
Engelhard/ICC Project 8,500,000 3.95 3/09/98 8,500,000
Ithaka Partners II Trust
Certificates 4,481,495 3.85 3/09/98 4,481,495
------------
31,406,495
GEORGIA 1.0%
Fulton County, Georgia Development
Authority IDR - STO Corporation
Project 3,400,000 3.90 3/09/98 3,400,000
Lee County, Georgia Development
Authority Revenue - Woodgrain
Millwork, Inc. Project 6,000,000 4.10 3/09/98 6,000,000
Newton County, Georgia IDA IDR -
Komatsu Forklift USA, Inc.
Project 7,500,000 4.10 3/09/98 7,500,000
Savannah, Georgia EDA IDR - Savannah
Steel & Metal Company Project 1,520,000 3.75 3/09/98 1,520,000
------------
18,420,000
ILLINOIS 3.5%
Arlington Heights, Illinois MFHR
Refunding - Dunton Tower Apartments
Project 7,050,000 4.35 3/09/98 7,050,000
Carol Stream, Illinois IDR - MI
Enterprises Project 2,650,000 3.70 3/09/98 2,650,000
Cicero, Cook County, Illinois IDR -
Harris Steel Company Project 3,370,000 3.75 3/09/98 3,370,000
Crawford County, Illinois Manufacturing
Facilities Revenue - Fair Rite
Products Corporation Project 4,500,000 3.60 3/09/98 4,500,000
Hazel Crest, Illinois Retirement Center
Revenue - Waterford Estates
Project 3,710,000 4.10 3/09/98 3,710,000
Illinois DFA EDR - Korex
Corporation Project 4,000,000 3.96 3/09/98 4,000,000
Illinois DFA IDR:
Associated Plastic Fabricators,
Inc. Project 1,800,000 3.90 3/09/98 1,800,000
Homak Manufacturing Company,
Inc. Project 6,670,000 3.70 3/09/98 6,670,000
Icon Metalcraft, Inc. Project 2,830,000 3.70 3/09/98 2,830,000
U.G.N., Inc. Project 3,000,000 4.30 3/09/98 3,000,000
Southwestern Illinois Development
Authority Revenue - AEL Industries,
Inc. Project 5,590,000 3.80 3/09/98 5,590,000
Woodridge, DuPage and Will Counties,
Illinois MFHR Refunding - Hinsdale Lake
Terrace Apartments Project 20,760,000 4.10 3/09/98 20,760,000
------------
65,930,000
INDIANA 0.3%
Ashley, Indiana EDR - Trin, Inc.
Project 4,000,000 3.90 3/09/98 4,000,000
Greencastle, Indiana EDR - H. A.
Parts Products of Indiana Company
Project 2,000,000 4.40 3/09/98 2,000,000
------------
6,000,000
28
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
IOWA 1.0%
Cedar Rapids, Iowa IDR Refunding
First Program - Columbus McKinnon
Corporation Project $ 1,035,000 4.05% 3/09/98 $ 1,035,000
Indianola, Iowa Health Care Facility
Revenue Refunding - The Village
Project 5,880,000 3.70 3/09/98 5,880,000
Iowa Falls, Iowa IDR Refunding -
GENPAK Corporation Project 3,800,000 4.41 3/09/98 3,800,000
West Des Moines, Iowa Revenue -
Woodgrain Millwork, Inc.
Project 6,700,000 4.10 3/09/98 6,700,000
-----------
17,415,000
KANSAS 1.0%
Kansas City, Kansas Private Activity
Revenue - Ex-L-Tube of Kansas,
Inc. Project 5,166,000 3.80 3/09/98 5,166,000
Kansas DFA MFHR:
First Kansas State Partnership,
LP Project 3,000,000 3.70 3/09/98 3,000,000
Trails of Garden City and
Cottonwood of Liberal
Projects 4,740,000 3.75 3/09/98 4,740,000
Osage City, Kansas Industrial
Revenue - Marley Continental
Homes of Kansas Project 4,800,000 3.72 3/09/98 4,800,000
-----------
17,706,000
KENTUCKY 4.6%
Bowling Green, Kentucky IBR - Bando
Manufacturing of America, Inc.
Project 3,645,000 4.30 3/09/98 3,645,000
Daviess County, Kentucky MFHR
Refunding - Park Regency
Apartments Project 4,155,000 3.70 3/09/98 4,155,000
Jeffersontown, Kentucky IDR -
Columbia Sussex Corporation
Facility 5,995,000 5.00 3/09/98 5,995,000
Kentucky DFA IDR - Hesco
Project 5,800,000 3.80 3/09/98 5,800,000
Kentucky Rural EDA IBR - JS
Technologies Corporation
Project 2,454,000 4.30 3/09/98 2,454,000
Ohio County, Kentucky PCR - Big
Rivers Electric Corporation
Project 48,500,000 4.05 3/09/98 48,500,000
Shelbyville, Kentucky IBR - Ichikoh
Manufacturing, Inc. Project 2,860,000 4.30 3/09/98 2,860,000
Somerset, Kentucky IBR - Tibbals
Flooring Company Project 10,000,000 3.85 3/09/98 10,000,000
Walton, Kentucky IDR - Dynamec,
Inc., a/k/a NAMCO, Inc.
Project 3,500,000 4.30 3/09/98 3,500,000
-----------
86,909,000
LOUISIANA 1.1%
New Orleans, Louisiana Aviation
Board Revenue - Passenger
Facility Charge Project 17,560,000 4.25 3/09/98 17,560,000
Ouachita Parish, Louisiana IDB
IDR - Epco Carbon Dioxide
Products Project 2,800,000 3.75 3/09/98 2,800,000
-----------
20,360,000
MARYLAND 1.0%
Baltimore, Maryland Mayor and City
Council IDA Revenue - City of
Baltimore Capital Acquisition
Program 10,000,000 4.20 3/09/98 10,000,000
Charles County, Maryland
Revenue - Chopp and Company,
Inc. Facility 3,500,000 4.05 3/09/98 3,500,000
Washington County, Maryland
EDR - Tandy Project 5,100,000 4.60 3/09/98 5,100,000
-----------
18,600,000
MASSACHUSETTS 0.7%
Massachusetts Industrial Finance
Agency IDR:
Portland Causeway Realty
Trust 2,600,000 4.41 3/09/98 2,600,000
U. S. Tsubaki, Inc. Project 4,700,000 4.35 3/09/98 4,700,000
Salem, Massachusetts IDFA IDR -
Applied Extrusion Technologies,
Inc. Project 6,500,000 4.41 3/09/98 6,500,000
-----------
13,800,000
MICHIGAN 1.3%
ABN-AMRO Chicago Corporation
LeaseTOPS Master Trust I 7,540,494 3.55 3/09/98 7,540,494
Lansing, Michigan Limited
Obligation EDC IDR - Ashland
Oil, Inc. Project 1,400,000 5.44 3/09/98 1,400,000
Michigan Strategic Fund Limited
Obligation Revenue - Coil
Center Corporation Project 8,850,000 4.35 3/09/98 8,850,000
Saline, Michigan EDC Limited
Obligation Revenue - Associated
Spring Project 7,000,000 4.25 3/09/98 7,000,000
-----------
24,790,494
MINNESOTA 0.6%
Farmington, Minnesota IDR -
WFW Ventures, LLC Project 2,000,000 3.54 3/09/98 2,000,000
New Brighton, Minnesota IDR -
Donatelle Holdings Project 3,500,000 3.80 3/09/98 3,500,000
Princeton, Minnesota IDR -
Plastic Products Company,
Inc. Project 1,400,000 3.80 3/09/98 1,400,000
St. Louis Park, Minnesota IDR -
Unicare Home, Inc. Project 4,800,000 3.80 3/09/98 4,800,000
-----------
11,700,000
MISSISSIPPI 0.6%
Mississippi Business Finance
Corporation IDR - Barclay
Furniture Company Project 1,500,000 3.75 3/09/98 1,500,000
Prentiss County, Mississippi IDR -
Heidelberg Eastern Project:
Series A 2,500,000 4.20 3/09/98 2,500,000
Series B 6,650,000 4.30 3/09/98 6,650,000
-----------
10,650,000
MISSOURI 3.1%
Missouri Development Finance Board
Infrastructure Facilities Revenue -
Kansas City, Missouri - Midtown
Redevelopment Project 17,900,000 3.85 3/09/98 17,900,000
St. Charles County, Missouri IDA
IDR Refunding - Country Club
Apartments Project 25,000,000 3.76 3/09/98 25,000,000
29
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
St. Louis County, Missouri IDA MFHR:
Black Forest Apartments
Project $ 4,000,000 3.70% 3/09/98 $ 4,000,000
Whispering Lakes Apartments
Project 8,000,000 3.75 3/09/98 8,000,000
West Plains, Missouri IDA IDR -
West Plains Manor Project 2,200,000 4.20 3/09/98 2,200,000
-----------
57,100,000
NEBRASKA 0.8%
Douglas County, Nebraska IDR -
QO Chemicals, Inc. Project 3,500,000 4.10 3/09/98 3,500,000
Nebraska IFA SFHR MERLOT 11,545,000 3.60 3/09/98 11,545,000
-----------
15,045,000
NEVADA 0.5%
Nevada Department of Commerce IDR -
Master-Halco, Inc. Project 4,300,000 4.65 3/09/98 4,300,000
Nevada Housing Division Multi-Unit
Housing Revenue - Oakmont at
Reno Project 4,450,000 3.65 3/09/98 4,450,000
-----------
8,750,000
NEW HAMPSHIRE 0.8%
New Hampshire HFA SFMR 9,900,000 3.60 3/09/98 9,900,000
New Hampshire IDA Industrial
Facility Revenue - Ferrofluidics
Corporation - Nashua Series
Project 5,000,000 3.85 3/09/98 5,000,000
-----------
14,900,000
NEW JERSEY 0.1%
New Jersey EDA EDR - Hickory
Industries, Inc. Project 1,700,000 4.10 3/09/98 1,700,000
NEW YORK 0.1%
Chautauqua County, New York IDA
IDR - Greater Buffalo Press,
Inc. Project 2,700,000 4.47 3/09/98 2,700,000
NORTH CAROLINA 2.2%
Alleghany County, North Carolina
Industrial Facilities and PCFA
IDR - Spring-Ford Knitting
Company, Inc. Project 2,250,000 3.49 3/09/98 2,250,000
Craven County, North Carolina
Industrial Facilities and PCFA
IDR - Wheatstone Corporation
Project 3,800,000 3.75 3/09/98 3,800,000
Gaston County, North Carolina
Industrial Facilities and PCFA
IDR - Spring-Ford Knitting
Company, Inc. Project 3,995,000 3.49 3/09/98 3,995,000
Guilford County, North Carolina
Industrial Facilities and PCFA
IDR - Bonset America Corporation
Project 4,000,000 4.10 3/09/98 4,000,000
Hoke County, North Carolina
Industrial Facilities and PCFA
IDR - Triangle Building Supply,
Inc. Project 2,500,000 3.75 3/09/98 2,500,000
Mecklenburg County, North Carolina
Industrial Facilities and PCFA
Industrial Revenue - Murata
Wiedemann, Inc. Project 5,300,000 4.10 3/09/98 5,300,000
North Carolina Agricultural Finance
Authority Agricultural Development -
J.E. Jones Lumber Company
Project 2,000,000 3.75 3/09/98 2,000,000
North Carolina Ports Authority Exempt
Facility Revenue - Jordan Lumber &
Supply, Inc. Project 4,815,000 3.75 3/09/98 4,815,000
Robeson County, North Carolina
Industrial Facilities and PCFA
IDR - Core Industries, Inc.
Project 5,000,000 3.75 3/09/98 5,000,000
Rutherford County, North Carolina
Industrial Facilities and PCFA
IDR - Spring-Ford Industries,
Inc. Project 6,650,000 3.49 3/09/98 6,650,000
-----------
40,310,000
OHIO 0.5%
Cuyahoga County, Ohio IDR:
Edge Seal Technologies, Inc. and
One Industry Drive, Inc.
Project 2,720,000 4.00 3/09/98 2,720,000
Motch Corporation Project 4,000,000 3.60 3/09/98 4,000,000
Gallia County, Ohio IDR - Harsco
Corporation Project 3,500,000 3.95 3/09/98 3,500,000
-----------
10,220,000
OREGON 0.8%
Metropolitan Service District,
Oregon Waste Disposal Project
Revenue - Riedel Oregon Compost
Company, Inc. Project 3,900,000 3.75 3/09/98 3,900,000
Oregon EDR:
Behlen Manufacturing Company
Project 5,500,000 3.55 3/09/98 5,500,000
JAE Oregon, Inc. Project 5,500,000 3.72 3/09/98 5,500,000
-----------
14,900,000
PENNSYLVANIA 2.1%
Bucks County, Pennsylvania IDA -
Double H Plastics, Inc.
Project 1,945,000 3.60 3/09/98 1,945,000
Lycoming County, Pennsylvania IDA
Manufacturing Facilities Revenue -
Coastal Aluminum Rolling Mills,
Inc. Project 3,800,000 3.60 3/09/98 3,800,000
Mercer County, Pennsylvania IDA
IDR - Penntecq, Inc. Project 4,000,000 4.20 3/09/98 4,000,000
Montgomery County, Pennsylvania
IDA IDR Refunding - Spring City
LP Project 5,000,000 4.09 3/09/98 5,000,000
Montgomery County, Pennsylvania
IDA - Laneko Engineering
Company Project 2,245,000 3.60 3/09/98 2,245,000
Philadelphia, Pennsylvania IDA
Revenue - 30th Street Station
Project 23,100,000 4.00 3/09/98 23,100,000
-----------
40,090,000
30
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
SOUTH CAROLINA 1.1%
Charleston County, South Carolina
Industrial Revenue - Tandy
Corporation Project $ 1,000,000 5.10% 3/09/98 $ 1,000,000
Richland County, South Carolina
IDR - Ashland Oil Project 1,400,000 5.44 3/09/98 1,400,000
South Carolina Jobs EDA EDR:
Galvstar, LLC Project 2,650,000 3.75 3/09/98 2,650,000
Glo-Tex Chemicals, Inc. Project 2,840,000 3.75 3/09/98 2,840,000
South Carolina Jobs EDA IDR:
Quoizel, Inc. Project 8,000,000 3.75 3/09/98 8,000,000
Roller Bearing Company of
America, Inc. Project 5,000,000 4.31 3/09/98 5,000,000
-----------
20,890,000
SOUTH DAKOTA 0.7%
Aberdeen, South Dakota IDR - Lomar
Development Company Project 220,000 4.15 3/09/98 220,000
Brookings, South Dakota IDR - Lomar
Development Company Project 2,120,000 4.15 3/09/98 2,120,000
Brookings, South Dakota IDR - Lomar
Development Company Project 250,000 3.95 3/09/98 250,000
South Dakota HDA Homeownership
Mortgage 10,000,000 3.65 3/09/98 10,000,000
-----------
12,590,000
TENNESSEE 1.9%
Blount County, Tennessee IDB IDR -
Advanced Crystal Technology, Inc.
Project 3,300,000 4.25 3/09/98 3,300,000
Carter County, Tennessee IDB MFHR
Refunding - Willow Run Apartments
Project 6,675,000 3.70 3/09/98 6,675,000
Coffee County, Tennessee Industrial
Board Revenue - M-Tek Project 2,700,000 4.60 3/09/98 2,700,000
Hamilton County, Tennessee IDB
MFHR - The Waterford Place
Apartments Project 9,600,000 3.81 3/09/98 9,600,000
Hamilton County, Tennessee IDB
Revenue - Komatsu America
Manufacturing Corporation
Project 5,400,000 3.90 3/09/98 5,400,000
Knox County, Tennessee Health,
Education and Housing Facilities
Board Revenue - Holston Long
Term Care Project 4,200,000 4.05 3/09/98 4,200,000
Memphis-Shelby County, Tennessee
IDB IDR - Techno Steel
Corporation Project 4,000,000 4.35 3/09/98 4,000,000
-----------
35,875,000
TEXAS 2.0%
ABIA Development Corporation Airport
Facilities Revenue - Austin Airport
Infrastructure Project Puttable
Floating Option Tax-Exempt Receipts,
Series PT-117 7,400,000 3.71 3/09/98 7,400,000
Austin County, Texas IDC IDR - Gulf
States Toyota, Inc. Project 4,250,000 3.90 3/09/98 4,250,000
Azle, Texas IDA IDR - Tandy
Corporation Project 3,000,000 4.59 3/09/98 3,000,000
Comal County, Texas IDA IDR - The
Simpson Companies Project 2,800,000 3.60 3/09/98 2,800,000
Deer Park, Texas Port Development
Corporation IDR - Ashland Oil,
Inc. Project 4,700,000 5.44 3/09/98 4,700,000
Galveston County, Texas HFC MFHR
Refunding - Village By the Sea
Apartments Project 3,000,000 3.95 3/09/98 3,000,000
Grand Prairie, Texas IDA IDR -
Precision/API Ketema Project 3,400,000 3.75 3/09/98 3,400,000
Harris County, Texas IDC IDR -
Chusei USA, Inc. Project 1,400,000 3.85 3/09/98 1,400,000
Longview, Texas Industrial
Corporation IDR - Longview Guest
Inn Project 2,400,000 3.75 3/09/98 2,400,000
Montgomery County, Texas IDC IDR -
Porous Media, Ltd. Project 3,400,000 3.95 3/09/98 3,400,000
Robstown, Texas IDC IDR - Concrete
Pipe and Products Company, Inc.
Project 2,000,000 3.80 3/09/98 2,000,000
-----------
37,750,000
UTAH 0.6%
Utah Housing Finance Agency SFMR 11,130,000 3.60 3/09/98 11,130,000
VIRGINIA 0.7%
Oyster Point, Virginia Development
Corporation MFHR - Jefferson
Point Development Project 5,200,000 3.80 3/09/98 5,200,000
Richmond, Virginia Redevelopment
and Housing Authority Tobacco
Row Revenue 7,000,000 3.80 3/09/98 7,000,000
-----------
12,200,000
WASHINGTON 0.8%
Pierce County, Washington EDC -
Brown & Haley Project 1,895,000 4.80 3/09/98 1,895,000
Port Moses Lake, Washington Public
Corporation Industrial Revenue -
Basic American Foods Project 4,200,000 4.00 3/09/98 4,200,000
Port of Vancouver, Washington Special
Revenue - United Grain Corporation
of Oregon Project 9,500,000 4.00 3/09/98 9,500,000
-----------
15,595,000
WISCONSIN 1.6%
Ashwaubenon, Wisconsin IDR - Pioneer
Metal Finishing, Inc. Project 1,615,000 4.05 3/09/98 1,615,000
Columbus, Wisconsin IDR - Maysteel
Corporation Project 2,000,000 3.75 3/09/98 2,000,000
Combined Locks, Wisconsin IDR -
Appleton Papers, Inc. Project 4,300,000 3.65 3/09/98 4,300,000
De Pere, Wisconsin IDR - Cleaning
Systems, Inc. Project 4,000,000 3.70 3/09/98 4,000,000
Manitowoc, Wisconsin IDR - HTH
Enterprises, LLC/Zenith Sintered
Products, Inc. Project 6,000,000 3.65 3/09/98 6,000,000
Milwaukee, Wisconsin Redevelopment
Authority Development Revenue -
Washington Square Phase III
Project 8,180,000 4.50 3/09/98 8,180,000
New London, Wisconsin IDR - Steel
King Industries, Inc. Project 3,730,000 3.80 3/09/98 3,730,000
-----------
29,825,000
WYOMING 0.3%
Campbell County, Wyoming IDR - Powder
Basin Properties Project 5,470,000 3.70 3/09/98 5,470,000
31
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG MUNICIPAL MONEY MARKET FUND (CONTINUED)
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
MULTIPLE STATES 10.1%
Capital Realty Investments Tax
Exempt Fund, Ltd. Floating Rate
Certificates:
Series 1996-4 $38,770,000 3.80% 3/09/98 $ 38,770,000
Series 1996-5 27,135,000 3.75 3/09/98 27,135,000
Clipper Tax-Exempt Certificate
Trusts 87,912,129 3.71 3/09/98 87,912,129
NCNB Pooled Tax-Exempt Trust COP 2,100,000 4.25 3/09/98 2,100,000
Puttable Floating Option
Tax-Exempt Receipts:
Series PA-154 27,169,000 3.71 3/09/98 27,169,000
Series PP-4 5,385,000 3.80 3/09/98 5,385,000
--------------
188,471,129
- ------------------------------------------------------------------------------
TOTAL WEEKLY VARIABLE RATE PUT BONDS 1,154,102,118
- ------------------------------------------------------------------------------
DAILY VARIABLE RATE PUT BONDS 2.7%
COLORADO 0.2%
Arapahoe County, Colorado MFHR
Refunding - Stratford Station
Project 3,455,000 4.40 3/02/98 3,455,000
VIRGINIA 0.5%
Richmond Virginia IDA Revenue -
Cogentrix of Richmond, Inc. Project:
Series A 6,800,000 4.15 3/02/98 6,800,000
Series B 3,500,000 4.15 3/02/98 3,500,000
--------------
10,300,000
WYOMING 1.9%
Converse County, Wyoming Environmental
Improvement Revenue - PacifiCorp
Project 5,300,000 4.00 3/02/98 5,300,000
Lincoln County, Wyoming Environmental
Improvement Revenue - PacifiCorp
Project 22,000,000 4.00 3/02/98 22,000,000
Sweetwater County, Wyoming
Environmental Improvement
Revenue - Pacificorp Project 9,200,000 4.00 3/02/98 9,200,000
--------------
36,500,000
MULTIPLE STATES 0.1%
Puttable Floating Option Tax-Exempt
Receipts:
Series PPT-4 1,520,000 4.05 3/02/98 1,520,000
Series PPT-7 75,000 4.05 3/02/98 75,000
--------------
1,595,000
- ------------------------------------------------------------------------------
TOTAL DAILY VARIABLE RATE PUT BONDS 51,850,000
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES 96.5% 1,806,585,194
Other Assets and Liabilities, Net 3.5% 64,646,599
- ------------------------------------------------------------------------------
NET ASSETS 100.0% $1,871,231,79
==============================================================================
32
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
===============================================================================
STRONG STEP 1 MONEY FUND
===============================================================================
Principal Yield to Maturity Amortized
Amount Maturity Date (d) Cost (Note 2)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER 100.3%
American Honda Finance
Corporation $350,000 5.55% 6/10/98 $ 344,604
Anthem Insurance Companies, Inc.
(Acquired 2/03/98; Cost
$248,683) (b) 250,000 5.58 3/09/98 249,729
Aon Corporation 250,000 5.53 3/03/98 249,962
Aristar, Inc. 250,000 5.56 3/05/98 249,884
Atlas Copco AB (Acquired 2/23/98;
Cost $192,993) (b) 195,000 5.53 5/01/98 193,203
BTM Capital Corporation (Acquired
2/03/98; Cost $246,484) (b) 250,000 5.82 5/01/98 247,575
British Gas Capital, Inc. 250,000 5.38 8/20/98 243,611
Calcasieu Parish, Inc. Louisiana
IDB Environmental Revenue 250,000 5.54 6/12/98 250,000
Calcot, Ltd. 250,000 5.55 4/27/98 247,842
Centre Square Funding Corporation
(Acquired 2/17/98; Cost
$248,961) (b) 250,000 5.54 3/16/98 249,461
Creative Capital Corporation (Acquired
2/03/98; Cost $246,918) (b) 250,000 6.25 4/15/98 248,090
Franklin Resources, Inc. (Acquired
2/03/98; Cost $246,480) (b) 250,000 5.45 5/07/98 247,502
General Mills, Inc. 1,700 5.23 Upon Demand 1,700
Gotham Funding Corporation (Acquired
2/03/98; Cost $247,160) (b) 250,000 5.68 4/16/98 248,225
Harley-Davidson Funding Corporation
(Acquired 2/19/98; Cost
$198,986) (b) 200,000 5.53 3/24/98 199,324
Heller Financial, Inc. 250,000 5.85 3/05/98 249,878
Kajima Capital America, Inc. (Acquired
2/03/98; Cost $246,389) (b) 250,000 6.50 4/24/98 247,608
LOCAP, Inc. (Acquired 2/26/98;
Cost $258,572) (b) 260,000 5.65 4/02/98 258,735
Minolta Corporation 200,000 5.60 3/12/98 199,689
Mitsubishi Motors Credit America,
Inc. 250,000 5.95 4/13/98 248,264
Monsanto Company (Acquired 2/25/98;
Cost $244,399) (b) 250,000 5.45 7/23/98 244,588
Newell Company (Acquired 2/03/98;
Cost $248,848) (b) 250,000 5.53 3/05/98 249,885
Nordbanken North America, Inc. 250,000 5.37 8/25/98 243,437
Pitney Bowes Credit Corporation 5,000 5.23 Upon Demand 5,000
Repeat Offering Securitization
Entity, Inc. (Acquired 2/23/98;
Cost $199,568) (b) 200,000 5.56 3/10/98 199,753
SAFECO Corporation (Acquired 2/20/98;
Cost $247,708) (b) 250,000 5.50 4/21/98 248,090
Sanwa Business Credit
Corporation 250,000 6.05 4/06/98 248,529
Society of New York Hospital
Fund, Inc. 250,000 5.50 4/27/98 247,861
Sotheby's, Inc. 230,000 5.62 4/03/98 228,851
Southern Electric Generating
Company (Acquired 2/03/98;
Cost $248,941) (b) 250,000 5.65 3/02/98 250,000
System Capital Finance
Corporation 250,000 5.52 3/18/98 249,387
TRW, Inc. (Acquired 2/20/98;
Cost $148,561) (b) 150,000 5.48 4/24/98 148,790
Tri-Lateral Capital USA, Inc.
(Acquired 2/03/98; Cost
$247,625) (b) 250,000 6.00 4/01/98 248,750
Wisconsin Electric Power Company 300 5.21 Upon Demand 300
- -----------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER 7,488,107
- -----------------------------------------------------------------------------
UNITED STATES GOVERNMENT AND AGENCY ISSUES 10.0%
Federal Home Loan Bank Bonds (f) 500,000 5.70 6/17/98 500,000
Federal Home Loan Bank Bonds 250,000 5.71 6/04/98 250,000
- -----------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT AND AGENCY ISSUES 750,000
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES 110.3% 8,238,107
Other Assets and Liabilities, Net (10.3%) (769,627)
- -----------------------------------------------------------------------------
NET ASSETS 100.0% $7,468,480
=============================================================================
33
<PAGE>
SCHEDULES OF INVESTMENTS IN SECURITIES (CONTINUED) FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LEGEND
- -------------------------------------------------------------------------------
(a) Short-term investments include any security which has a maturity of less
than one year.
(b) Restricted security.
(c) All or a portion of security pledged to cover margin requirements for
futures contracts.
(d) Maturity date represents actual maturity or the longer of the next put date
or interest adjustment date. For U.S. Government Agency Securities,
maturity date represents actual maturity or the next interest adjustment
date.
(e) Variable rate security.
(f) When-issued security.
(g) Affiliated issuer (See Note 7 of Notes to Financial Statements).
Percentages are stated as a percent of net assets.
See notes to financial statements.
ABBREVIATIONS
- -------------------------------------------------------------------------------
The following is a list of abbreviations that may be used in the Schedules of
Investments in Securities:
BAN -- Bond Anticipation Notes
CDA -- Commercial Development Authority
CDR -- Commercial Development Revenue
COP -- Certificates of Participation
DFA -- Development Finance Authority
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
EDFA -- Economic Development Finance Authority
EDR -- Economic Development Revenue
EFA -- Educational Facilities Authority
EXTRAS -- Extendable Rate Adjustable Securities
GO -- General Obligation
HDA -- Housing Development Authority
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
HFC -- Housing Finance Corporation
IBA -- Industrial Building Authority
IBR -- Industrial Building Revenue
IDA -- Industrial Development Authority
IDB -- Industrial Development Board
IDC -- Industrial Development Corporation
IDFA -- Industrial Development Finance Authority
IDR -- Industrial Development Revenue
IFA -- Investment Finance Authority
MERLOT -- Municipal Exempt Receipt - Liquidity Optional Tender
MFHR -- Multi-Family Housing Revenue
MFMR -- Multi-Family Mortgage Revenue
PCR -- Pollution Control Revenue
PCFA -- Pollution Control Financing Authority
RAN -- Revenue Anticipation Notes
SFHR -- Single Family Housing Revenue
SFMR -- Single Family Mortgage Revenue
TAN -- Tax Anticipation Notes
TRAN -- Tax and Revenue Anticipation Notes
34
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
February 28, 1998
(In Thousands, Except Per Share Amounts)
<CAPTION>
STRONG STRONG MUNICIPAL
ADVANTAGE FUND ADVANTAGE FUND
-------------- ----------------
ASSETS:
<S> <C> <C>
Investments in Securities, at Value
Unaffiliated Issuers (Cost of $2,163,972 and $994,667, respectively) $2,177,403 $1,002,281
Affiliated Issuers (Cost of $0 and $16,100, respectively) -- 16,100
Receivable for Securities Sold 780 44,485
Receivable for Fund Shares Sold 956 113
Interest Receivable 23,124 13,855
Other Assets -- 272
---------- ----------
Total Assets 2,202,263 1,077,106
LIABILITIES:
Payable for Securities Purchased 27,359 61,645
Payable for Fund Shares Redeemed 709 133
Dividends Payable 9,854 3,245
Accrued Operating Expenses and Other Liabilities 695 43
---------- ----------
Total Liabilities 38,617 65,066
---------- ----------
NET ASSETS $2,163,646 $1,012,040
========== ==========
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $2,161,406 $1,007,223
Accumulated Net Realized Loss (10,365) (2,797)
Net Unrealized Appreciation 12,605 7,614
---------- ----------
Net Assets $2,163,646 $1,012,040
========== ==========
Capital Shares Outstanding (Unlimited Number Authorized) 214,677 201,173
NET ASSET VALUE PER SHARE $10.08 $5.03
====== =====
</TABLE>
<TABLE>
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL STRONG STEP 1
MONEY FUND MONEY MARKET FUND MONEY FUND
--------------- ----------------- -------------
ASSETS:
<S> <C> <C> <C>
Investments in Securities, at Amortized Cost $1,506,693 $1,806,585 $8,238
Receivable for Securities Sold -- 76,986 --
Receivable for Fund Shares Sold 136 -- --
Interest Receivable 6,518 15,140 1
Other Assets 61 33 2
---------- ---------- ------
Total Assets 1,513,408 1,898,744 8,241
LIABILITIES:
Payable for Securities Purchased 23,625 22,615 750
Payable for Fund Shares Redeemed -- 11 --
Dividends Payable 6,094 4,722 21
Accrued Operating Expenses and Other Liabilities 149 164 2
---------- ---------- ------
Total Liabilities 29,868 27,512 773
---------- ---------- ------
NET ASSETS $1,483,540 $1,871,232 $7,468
========== ========== ======
NET ASSETS CONSIST OF:
Capital Stock (par value and paid-in capital) $1,483,540 $1,871,232 $7,468
========== ========== ======
Capital Shares Outstanding (Unlimited Number Authorized) 1,483,540 1,871,232 7,468
NET ASSET VALUE PER SHARE $1.00 $1.00 $1.00
===== ===== =====
35
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
For the Year Ended February 28, 1998
(In Thousands)
<CAPTION>
STRONG STRONG MUNICIPAL
ADVANTAGE FUND ADVANTAGE FUND
-------------- ----------------
INCOME:
<S> <C> <C>
Dividends - Unaffiliated Issuers $ 1,895 $ --
Dividends - Affiliated Issuers 313 23
Interest 127,066 41,335
-------- -------
Total Income 129,274 41,358
EXPENSES:
Investment Advisory Fees 11,086 5,034
Custodian Fees 68 29
Shareholder Servicing Costs 2,430 346
Other 800 285
-------- -------
Total Expenses before Waivers and Absorptions 14,384 5,694
Voluntary Expense Waivers and Absorptions by Advisor -- (1,926)
-------- -------
Expenses, Net 14,384 3,768
-------- -------
NET INVESTMENT INCOME 114,890 37,590
REALIZED AND UNREALIZED GAIN (LOSS):
Net Realized Gain (Loss) on:
Investments 8,085 (698)
Futures Contracts and Options (15,251) (475)
-------- -------
Net Realized Loss (7,166) (1,173)
Change in Unrealized Appreciation/Depreciation on:
Investments 4,923 5,108
Futures Contracts and Options 88 --
-------- -------
Net Change in Unrealized Appreciation/Depreciation 5,011 5,108
-------- -------
NET GAIN (LOSS) (2,155) 3,935
-------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $112,735 $41,525
======== =======
</TABLE>
<TABLE>
<CAPTION>
STRONG HERITAGE STRONG MUNICIPAL STRONG STEP 1
MONEY FUND MONEY MARKET FUND MONEY FUND
--------------- ----------------- -------------
(NOTE 1)
<S> <C> <C> <C>
INTEREST INCOME $99,301 $77,310 $27
EXPENSES:
Investment Advisory Fees 8,707 9,311 2
Custodian Fees 69 44 --
Shareholder Servicing Costs 853 1,504 2
Accounting Fees 15 32 4
Federal and State Registration Fees 84 70 1
Other 233 203 1
------- ------- ---
Total Expenses before Waivers and Absorptions 9,961 11,164 10
Voluntary Expense Waivers and Absorptions by Advisor (5,645) -- (10)
------- ------- ---
Expenses, Net 4,316 11,164 --
------- ------- ---
NET INVESTMENT INCOME $94,985 $66,146 $27
======= ======= ===
</TABLE>
36
See notes to financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
(In Thousands)
STRONG STRONG MUNICIPAL
ADVANTAGE FUND ADVANTAGE FUND
------------------------------- -------------------------------
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
FEB. 28, 1998 FEB. 28, 1997 FEB. 28, 1998 FEB. 28, 1997
------------- ------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 114,890 $ 76,093 $ 37,590 $ 19,356
Net Realized Gain (Loss) (7,166) 4,004 (1,173) (1,624)
Change in Unrealized Appreciation/Depreciation 5,011 4,042 5,108 2,656
---------- ---------- ---------- --------
Increase in Net Assets Resulting from Operations 112,735 84,139 41,525 20,388
DISTRIBUTIONS:
From Net Investment Income (114,890) (75,751) (37,590) (19,356)
From Net Realized Gains -- -- -- (1)
---------- ---------- ---------- --------
Total Distributions (114,890) (75,751) (37,590) (19,357)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 2,163,729 1,362,671 1,170,270 863,029
Proceeds from Reinvestment of Distributions 102,231 65,491 32,175 15,060
Payment for Shares Redeemed (1,619,853) (916,636) (838,603) (367,350)
---------- ---------- ---------- --------
Increase in Net Assets from Capital Share Transactions 646,107 511,526 363,842 510,739
---------- ---------- ---------- --------
TOTAL INCREASE IN NET ASSETS 643,952 519,914 367,777 511,770
NET ASSETS:
Beginning of Period 1,519,694 999,780 644,263 132,493
---------- ---------- ---------- --------
End of Period $2,163,646 $1,519,694 $1,012,040 $644,263
========== ========== ========== ========
TRANSACTIONS IN SHARES OF THE FUND:
Sold 214,499 135,808 233,361 172,620
Issued in Reinvestment of Distributions 10,135 6,528 6,415 3,010
Redeemed (160,610) (91,328) (167,207) (73,479)
------- ------- ------- -------
Net Increase in Shares of the Fund 64,024 51,008 72,569 102,151
======= ======= ======= =======
</TABLE>
<TABLE>
STRONG HERITAGE STRONG MUNICIPAL STRONG STEP 1
MONEY FUND MONEY MARKET FUND MONEY FUND
---------------------------- ---------------------------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
FEB. 28, 1998 FEB. 28, 1997 FEB. 28, 1998 FEB. 28, 1997 FEB. 28,1998
------------- ------------- ------------- ------------- ------------
(NOTE 1)
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net Investment Income $ 94,985 $ 84,722 $ 66,146 $ 60,309 $ 27
Net Realized Loss -- (13,448) -- -- --
---------- ---------- ---------- ---------- ------
Increase in Net Assets Resulting from Operations 94,985 71,274 66,146 60,309 27
DISTRIBUTIONS:
From Net Investment Income (94,985) (84,722) (66,146) (60,309) (27)
CAPITAL SHARE TRANSACTIONS:
Proceeds from Shares Sold 1,883,618 3,030,732 3,432,374 3,223,480 9,877
Proceeds from Reinvestment of Distributions 91,575 75,780 62,048 56,751 --
Payment for Shares Redeemed (2,491,811) (2,048,407) (3,518,087) (2,994,239) (2,409)
---------- ---------- ---------- ---------- ------
Increase (Decrease) in Net Assets from Capital
Share Transactions (516,618) 1,058,105 (23,665) 285,992 7,468
CAPITAL CONTRIBUTION (NOTE 4) -- 13,448 -- -- --
---------- ---------- ---------- ---------- ------
TOTAL INCREASE (DECREASE) IN NET ASSETS (516,618) 1,058,105 (23,665) 285,992 7,468
NET ASSETS:
Beginning of Period 2,000,158 942,053 1,894,897 1,608,905 --
---------- ---------- ---------- ---------- ------
End of Period $1,483,540 $2,000,158 $1,871,232 $1,894,897 $7,468
========== ========== ========== ========== ======
TRANSACTIONS IN SHARES OF THE FUND:
Sold 1,883,618 3,030,732 3,432,374 3,223,480 9,877
Issued in Reinvestment of Distributions 91,575 75,780 62,048 56,751 --
Redeemed (2,491,811) (2,048,407) (3,518,087) (2,994,239) (2,409)
--------- --------- --------- --------- -----
Net Increase (Decrease) in Shares of the Fund (516,618) 1,058,105 (23,665) 285,992 7,468
========= ========= ========= ========= =====
37
See notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
February 28, 1998
1. ORGANIZATION
The accompanying financial statements represent the Strong Cash Management
Funds, which include the following diversified, open-end management
investment companies registered under the Investment Company Act of 1940:
- Strong Advantage Fund, Inc.
- Strong Municipal Advantage Fund (a series of Strong Municipal Funds, Inc.
- Strong Heritage Money Fund (a series of Strong Heritage Reserve Series,
Inc.)
- Strong Municipal Money Market Fund (a series of Strong Municipal Funds,
Inc.)
- Strong Step 1 Money Fund (a series of Strong Heritage Reserve Series,
Inc.)
The inception date for Strong Step 1 Money Fund is January 31, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements.
(A) SECURITY VALUATION -- Securities of Strong Advantage Fund and Strong
Municipal Advantage Fund are valued at fair value through valuations
obtained by a commercial pricing service or the mean of the bid and
asked prices when no last sales price is available. Securities for
which market quotations are not readily available are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of
Directors. Securities which are purchased within 60 days of their
stated maturity and all investments in Strong Heritage Money Fund,
Strong Municipal Money Market Fund, and Strong Step 1 Money Fund are
valued at amortized cost, which approximates current value. Amortized
cost for federal income tax and financial reporting purposes is the
same.
The Funds may own certain investment securities which are restricted as
to resale. These securities are valued after giving due consideration
to pertinent factors, including recent private sales, market conditions
and the issuer's financial performance. The Funds generally bear the
costs, if any, associated with the disposition of restricted securities.
Aggregate cost and fair value of these restricted securities held at
February 28, 1998 were as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE PERCENT OF
COST FAIR VALUE NET ASSETS LIQUID*
------------ ------------ ---------- -------
<S> <C> <C> <C> <C>
Strong Advantage Fund $600,431,741 $601,241,528 27.8% 73.3%
Strong Heritage Money Fund 681,725,958 684,372,990 46.1% 100.0%
Strong Step 1 Money Fund 3,967,276 3,979,308 53.3% 100.0%
</TABLE>
*Percentage is either Section 4(2) commercial paper or is eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 and also
has been determined to be liquid by the Advisor based upon guidelines
established by the Fund's Board of Directors.
(B) FEDERAL INCOME AND EXCISE TAXES AND DISTRIBUTIONS TO SHAREHOLDERS -- It
is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to their
shareholders in a manner which results in no tax cost to the Funds.
Therefore, no federal income or excise tax provision is required.
The character of distributions made during the year from net investment
income or net realized gains may differ from the characterization for
federal income tax purposes due to differences in the recognition of
income and expense items for financial statement and tax purposes.
Where appropriate, reclassifications between net asset accounts are made
for such differences that are permanent in nature.
(C) REALIZED GAINS AND LOSSES ON INVESTMENT TRANSACTIONS -- Gains or losses
realized on investment transactions are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
(D) FUTURES -- Upon entering into a futures contract, the Funds pledge to
the broker cash or other investments equal to the minimum "initial
margin" requirements of the exchange. The Funds also receive from or
pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as
"variation margin," and are recorded as unrealized gains or losses.
When the futures contract is closed, a realized gain or loss is recorded
equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
38
<PAGE>
- -------------------------------------------------------------------------------
(E) OPTIONS -- The Funds may write put or call options (none were written
during the period). Premiums received by the Funds upon writing put or
call options are recorded as an asset with a corresponding liability
which is subsequently adjusted to the current market value of the
option. When an option expires, is exercised, or is closed, the Funds
realize a gain or loss, and the liability is eliminated. The Funds
continue to bear the risk of adverse movements in the price of the
underlying asset during the period of the option, although any potential
loss during the period would be reduced by the amount of the option
premium received.
(F) FOREIGN CURRENCY TRANSLATION -- Investment securities and other assets
and liabilities initially expressed in foreign currencies are converted
to U.S. dollars based upon current exchange rates. Purchases and sales
of foreign investment securities and income are converted to U.S.
dollars based upon currency exchange rates prevailing on the respective
dates of such transactions. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected
as a component of such gains or losses.
(G) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Forward foreign currency
exchange contracts are valued at the forward rate and are marked-to-
market daily. The change in market value is recorded as an unrealized
gain or loss. When the contract is closed, the Funds record an exchange
gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
(H) REPURCHASE AGREEMENTS -- The Funds may enter into repurchase agreements
with institutions that the Funds' investment advisor, Strong Capital
Management, Inc. ("the Advisor") has determined are creditworthy
pursuant to criteria adopted by the Board of Directors. Each repurchase
agreement is recorded at cost. The Funds require that the collateral,
represented by securities (primarily U.S. Government securities),
purchased in a repurchase transaction be maintained in a segregated
account with a custodian in a manner sufficient to enable the Funds to
obtain those securities in the event of a default under the repurchase
agreement. On a daily basis, the Advisor monitors the value of the
collateral transferred under each repurchase agreement to ensure the
value of the collateral exceeds the amounts owed to the Funds under each
repurchase agreement by at least 2%.
(I) ADDITIONAL INVESTMENT RISKS -- The Funds may utilize derivative
instruments including options, futures, and other instruments with
similar characteristics to the extent that they are consistent with the
Funds' investment objectives and limitations. The Funds intend to use
such derivative instruments primarily to hedge or protect against
adverse movements in securities prices or interest rates. The use of
these instruments may involve risks such as the possibility of illiquid
markets or imperfect correlation between the value of the instruments
and the underlying securities, or that the counterparty will fail to
perform its obligations.
Foreign denominated assets and forward currency contracts may involve
greater risks than domestic transactions, including currency, political
and economic, regulatory and market risks.
(J) USE OF ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
(K) OTHER -- Investment security transactions are recorded as of the trade
date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis
and includes amortization of premium and discounts.
3. RELATED PARTY TRANSACTIONS
The Advisor, with whom certain officers and directors of the Funds are
affiliated, provides investment advisory services and shareholder
recordkeeping and related services to the Funds. Investment advisory fees,
which are established by terms of the Advisory Agreements, are based on the
following annualized rates of the average daily net assets: Strong Heritage
Money Fund, Strong Municipal Money Market Fund, and Strong Step 1 Money Fund
0.50%, Strong Municipal Advantage Fund and Strong Advantage Fund 0.60%.
Advisory fees are subject to reimbursement by the Advisor if a Fund's
operating expenses exceed certain levels. Shareholder recordkeeping and
related service fees are based on contractually established rates for each
open and closed shareholder account. In addition, the Advisor is
compensated for certain other services related to costs incurred for reports
to shareholders.
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
February 28, 1998
Strong Advantage Fund and Strong Municipal Advantage Fund may invest cash
reserves in money market funds sponsored and managed by the Advisor, subject
to certain limitations. The terms of such transactions are identical to
those of non-related entities except that, to avoid duplicate investment
advisory fees, advisory fees of each Fund invested in such money market
funds are reduced by an amount equal to advisory fees paid to the Advisor
under its investment advisory agreement with the money market funds. Funds
sponsored and managed by the Advisor own 40.2% of the Step 1 Money Fund as
of February 28, 1998.
Certain information regarding related party transactions for the year ended
February 28, 1998, excluding the effect of waivers and absorptions, is as
follows:
<TABLE>
<CAPTION>
PAYABLE TO OTHER SHAREHOLDER UNAFFILIATED
ADVISOR AT SERVICING EXPENSES DIRECTORS'
FEBRUARY 28, 1998 PAID TO ADVISOR FEES
----------------- ------------------ ------------
<S> <C> <C> <C>
Strong Advantage Fund $ 96,918 $27,375 $18,466
Strong Municipal Advantage Fund 40,542 4,766 7,994
Strong Heritage Money Fund 149,424 9,553 20,224
Strong Municipal Money Market Fund 119,783 20,806 20,118
Strong Step 1 Money Fund 2,350 -- --
</TABLE>
4. CAPITAL CONTRIBUTION
On January 31, 1997, the Advisor purchased a security from Strong Heritage
Money Fund for $13,448,000 in excess of the security's fair value. The Fund
recorded a realized loss on the sale and a capital contribution of an equal
amount from the Advisor. The Advisor received no shares of Strong Heritage
Money Fund or other consideration in exchange for such contribution. For
tax purposes, these capital contributions reduced the realized losses for
the year ended February 28, 1997.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term securities for the year ended
February 28, 1998 were as follows:
<TABLE>
PURCHASES SALES
------------------------------ ------------------------------
<CAPTION>
U.S. GOVERNMENT U.S. GOVERNMENT
AND AGENCY OTHER AND AGENCY OTHER
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Strong Advantage Fund $324,629,835 $2,300,177,112 $114,971,772 $1,880,338,262
Strong Municipal Advantage Fund -- 397,874,396 -- 202,379,691
Strong Heritage Money Fund -- -- -- --
Strong Municipal Money Market Fund -- -- -- --
Strong Step 1 Money Fund -- -- -- --
</TABLE>
6. INCOME TAX INFORMATION
At February 28, 1998, the investment cost, gross unrealized appreciation and
depreciation on investments and capital loss carryovers (expiring in varying
amounts through 2006) for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
FEDERAL TAX UNREALIZED UNREALIZED NET NET CAPITAL LOSS
COST APPRECIATION DEPRECIATION APPRECIATION CARRYOVERS
-------------- ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
Strong Advantage Fund $2,163,979,801 $21,015,616 $7,592,630 $13,422,986 $11,182,591
Strong Municipal Advantage Fund 1,010,778,926 7,606,442 4,663 7,601,779 2,796,493
Strong Heritage Money Fund 1,506,692,636 -- -- -- --
Strong Municipal Money Market Fund 1,806,585,194 -- -- -- --
Strong Step 1 Money Fund 8,238,107 -- -- -- --
</TABLE>
For corporate shareholders in Strong Advantage Fund, the percentage of
dividend income distributed for the year ended February 28, 1998 which is
designated as qualifying for the dividends-received deduction is 0.8%
(unaudited).
40
<PAGE>
- -------------------------------------------------------------------------------
7. INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940,
include those in which a Fund's holdings represent 5% or more of the
outstanding voting securities of the issuer, and any other Strong Fund. A
summary of transactions in the securities of these issuers during the year
ended February 28, 1998 is as follows:
<TABLE>
<CAPTION>
GROSS GROSS SALES VALUE DIVIDEND INCOME
SHARES HELD PURCHASES AND SHARES HELD FEB. 28, MAR. 1, 1997 -
MAR. 1, 1997 AND ADDITIONS REDUCTIONS FEB. 28, 1998 1998 FEB. 28, 1998
------------ ------------- ----------- ------------- ----------- ---------------
Strong Advantage Fund
- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Strong Institutional Money Fund -- 50,800,000 (50,800,000) -- -- $310,367
Strong Step 1 Money Fund -- 1,000,000 (1,000,000) -- -- 2,551
Strong Municipal Advantage Fund
- -------------------------------
Strong Municipal Money Market Fund -- 29,500,000 (13,400,000) 16,100,000 $16,100,000 23,402
41
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------
STRONG ADVANTAGE FUND
- ------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------------- --------------------------------------
<CAPTION>
Net Realized
Net Asset and Unrealized Total In Excess Net Asset
Value, Net Gains from From Net of Net Value,
Beginning Investment (Losses) on Investment Investment Realized Total End of
Year Ended of Period Income Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 $10.09 $0.62 ($0.01) $0.61 ($0.62) -- ($0.62) $10.08
Feb. 28, 1997 10.03 0.62 0.06 0.68 (0.62) -- (0.62) 10.09
Feb. 29, 1996(b) 10.04 0.10 (0.01) 0.09 (0.10) -- (0.10) 10.03
Dec. 31, 1995 9.98 0.67 0.06 0.73 (0.67) -- (0.67) 10.04
Dec. 31, 1994 10.19 0.55 (0.19) 0.36 (0.55) ($0.02) (0.57) 9.98
Dec. 31, 1993 10.01 0.59 0.18 0.77 (0.59) -- (0.59) 10.19
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
-----------------------------------------------------------
<CAPTION>
Net Ratio of Net
Assets, Ratio of Investment
End of Expenses Income Portfolio
Total Period (In to Average to Average Turnover
Year Ended Return Millions) Net Assets Net Assets Rate
<S> <C> <C> <C> <C> <C>
Feb. 28, 1998 +6.3% $2,164 0.8% 6.2% 109.6%
Feb. 28, 1997 +7.0% 1,520 0.8% 6.2% 154.9%
Feb. 29, 1996(b) +0.9% 1,000 0.8%* 6.3%* 17.2%
Dec. 31, 1995 +7.5% 990 0.8% 6.6% 183.7%
Dec. 31, 1994 +3.6% 911 0.8% 5.6% 221.0%
Dec. 31, 1993 +7.9% 415 0.9% 5.8% 304.8%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the two month period ended February 29, 1996. Total return and portfolio turnover rate are not annualized.
</TABLE>
<TABLE>
STRONG MUNICIPAL ADVANTAGE FUND
- ------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA(a)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------------------- --------------------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net and Unrealized from From Net From Net Value,
Beginning Investment Gains on Investment Investment Realized Total End of
Year Ended of Period Income Investments Operations Income Gains Distributions Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 $5.01 $0.22 $0.02 $0.24 ($0.22) -- ($0.22) $5.03
Feb. 28, 1997 5.01 0.25 0.00(c) 0.25 (0.25) $0.00(c) (0.25) 5.01
Feb. 29, 1996 (b) 5.00 0.06 0.01 0.07 (0.06) -- (0.06) 5.01
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
------------------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income Portfolio
Total Period (In to Average Waivers and to Average Turnover
Year Ended Return Millions) Net Assets Absorptions Net Assets Rate
<S> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 +5.0% $1,012 0.4% 0.7% 4.5% 49.6%
Feb. 28, 1997 +5.1% 644 0.0%(c) 0.7% 5.0% 40.8%
Feb. 29, 1996 (b) +1.4% 132 0.0%* 0.7%* 4.9%* 17.1%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the period from November 30, 1995 (inception) to February 29, 1996. Total return and portfolio turnover rate are
not annualized.
(c) Amount calculated is less than $0.01 or 0.1%.
</TABLE>
<TABLE>
STRONG HERITAGE MONEY FUND
- ------------------------------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
-------------------------------------- --------------------------
<CAPTION>
Net Asset Net Realized Total Net Asset
Value, Net Losses from From Net Capital Value,
Beginning Investment on Investment Investment Total Contribution End of
Year Ended of Period Income Investments Operations Income Distributions (Note 4) Period
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 $1.00 $0.05 -- $0.05 ($0.05) ($0.05) -- $1.00
Feb. 28, 1997 1.00 0.06 ($0.01) 0.05 (0.06) (0.06) $0.01 1.00
Feb. 29, 1996 (b) 1.00 0.04 -- 0.04 (0.04) (0.04) -- 1.00
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income
Total Period (In to Average Waivers and to Average
Year Ended Return Millions) Net Assets Absorptions Net Assets
<S> <C> <C> <C> <C> <C>
Feb. 28, 1998 +5.6% $1,484 0.2% 0.6% 5.4%
Feb. 28, 1997 +5.7%(c) 2,000 0.1% 0.6% 5.6%
Feb. 29, 1996 (b) +4.1% 942 0.0%*(d) 0.6%* 5.9%*
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the period from June 29, 1995 (inception) to February 29, 1996. Total return is not annualized.
(c) Had the Advisor not made the capital contribution as described in the notes to the financial statements, the adjusted
total return would have been 5.0% for the fiscal year ended February 28, 1997.
(d) Amount calculated is less than $0.01 or 0.1%.
</TABLE>
42
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
STRONG MUNICIPAL MONEY MARKET FUND
- -----------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS (b)
--------------------------------- --------------------------
<CAPTION>
Net Asset Total Net Asset
Value, Net from From Net Value,
Beginning Investment Investment Investment Total End of
Year Ended of Period Income Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 $1.00 $0.04 $0.04 ($0.04) ($0.04) $1.00
Feb. 28, 1997 1.00 0.03 0.03 (0.03) (0.03) 1.00
Feb. 29, 1996 (c) 1.00 0.01 0.01 (0.01) (0.01) 1.00
Dec. 31, 1995 1.00 0.04 0.04 (0.04) (0.04) 1.00
Dec. 31, 1994 1.00 0.03 0.03 (0.03) (0.03) 1.00
Dec. 31, 1993 1.00 0.02 0.02 (0.02) (0.02) 1.00
</TABLE>
RATIOS AND SUPPLEMENTAL DATA
-----------------------------------------------
Net Ratio of Net
Assets, Ratio of Investment
End of Expenses Income
Total Period (In to Average to Average
Year Ended Return Millions) Net Assets Net Assets
Feb. 28, 1998 +3.6% $1,871 0.6% 3.5%
Feb. 28, 1997 +3.5% 1,895 0.6% 3.5%
Feb. 29, 1996 (c) +0.6% 1,609 0.6%* 3.6%*
Dec. 31, 1995 +4.1% 1,416 0.6% 4.0%
Dec. 31, 1994 +2.9% 1,261 0.6% 2.9%
Dec. 31, 1993 +2.5% 1,173 0.7% 2.5%
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund
outstanding for the entire period.
(b) Tax-exempt for regular federal income tax purposes.
(c) For the two month period ended February 29, 1996. Total return is not
annualized.
<TABLE>
STRONG STEP 1 MONEY FUND
- --------------------------------------------------------------------------------------------------------
SELECTED PER-SHARE DATA (a)
-----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
--------------------------------- --------------------------
<CAPTION>
Net Asset Total Net Asset
Value, Net from From Net Value,
Beginning Investment Investment Investment Total End of
Year Ended of Period Income Operations Income Distributions Period
<S> <C> <C> <C> <C> <C> <C>
Feb. 28, 1998 (b) $1.00 $0.00(c) $0.00(c) -- -- $1.00
</TABLE>
<TABLE>
RATIOS AND SUPPLEMENTAL DATA
-------------------------------------------------------------------
<CAPTION>
Net Ratio of Expenses Ratio of Net
Assets, Ratio of to Average Net Investment
End of Expenses Assets Without Income
Total Period (In to Average Waivers and to Average
Year Ended Return Millions) Net Assets Absorptions Net Assets
<S> <C> <C> <C> <C> <C>
Feb. 28, 1998 (b) +0.5% $7 0.0%* 2.0%* 6.1%*
* Calculated on an annualized basis.
(a) Information presented relates to a share of capital stock of the Fund outstanding for the entire period.
(b) For the period from January 31, 1998 (inception) to February 28, 1998. Total return is not annualized.
(c) Amount calculated is less than $0.01 or 0.1%.
43
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Shareholders and Board of Directors of the
Strong Cash Management Funds
We have audited the accompanying statements of assets and liabilities of Strong
Municipal Money Market Fund, Strong Municipal Advantage Fund (two of the
portfolios constituting the Strong Municipal Funds, Inc.), Strong Advantage
Fund, Inc., Strong Heritage Money Fund and Strong Step 1 Money Fund (two of the
portfolios constituting the Strong Heritage Reserve Series, Inc.), (all five of
the portfolios collectively referred to herein as the "Strong Cash Management
Funds"), including the schedules of investments in securities, as of February
28, 1998, and the related statements of operations, statements of changes in
net assets and the financial highlights for each of the periods indicated.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of February 28, 1998 by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Strong Cash Management Funds as of February 28, 1998, the results of
their operations, the changes in their net assets, and the financial highlights
for each of the periods indicated, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
April 8, 1998
44
<PAGE>
DIRECTORS
Richard S. Strong
Willie D. Davis
Stanley Kritzik
Marvin E. Nevins
William F. Vogt
OFFICERS
Richard S. Strong, Chairman of the Board
Mary F. Hoppa, Vice President
Thomas P. Lemke, Vice President
John S. Weitzer, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
John A. Flanagan, Treasurer
INVESTMENT ADVISOR
Strong Capital Management, Inc.
P.O. Box 2936, Milwaukee, Wisconsin 53201
CUSTODIAN
Firstar Trust Company
P.O. Box 701, Milwaukee, Wisconsin 53201
AUDITOR
Coopers & Lybrand L.L.P.
411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Godfrey & Kahn, S.C.
780 North Water Street, Milwaukee, Wisconsin 53202
<PAGE>
For a prospectus containing more complete information, including management
fees and expenses, please call 1-800-368-1030. Please read it carefully before
investing or sending money. This report does not constitute an offer for the
sale of securities. Strong Funds are offered for sale by prospectus only.
[PICTURE OF TELEPHONE]
To order a free prospectus kit,
CALL 1-800-368-1030
To learn more about our funds,
discuss an existing account,
or conduct a transaction,
CALL 1-800-368-3863
-------------------
If you are a
Financial Professional,
CALL 1-800-368-1683
[PICTURE OF STRONG WEB SITE ON COMPUTER]
Strong On-line
www.strong-funds.com
[STRONG LOGO]
STRONG FUNDS
P.O. Box 2936 o Milwaukee, Wisconsin 53201
Strong Funds Distributors, Inc. 7553D98 98ACSH
